TABLE OF CONTENTS

REPORTS OF THE STANDING COMMITTEES

AND OTHER COMMITTEES

As Considered by

The Council of the City of Toronto

on July 29, 30 and 31, 1998

STRATEGIC POLICIES AND PRIORITIES COMMITTEE

REPORT No. 16

1Sale of Surplus Spadina Project Property- 151 Everden Road (Ward 28 - York Eglinton)

2Amendment to Agreement to Facilitate the Expansion of Access Rights to Municipal Road Allowances- Metronet Communications Group Inc. - Supplementary Report

3Implications of Year 2000 Computer Compliance Issues- Extension of Contract No. T-27-96 - Maintenance of Traffic and Related Devices

4Request for Proposal for Use of Consultants in Office and Civic Space Consolidation

5Scarborough Port Union Pedestrian Underpass- Transportation Capital Budget Project No. C-TR-703

6Award of Contract for a Small Scale Mixed Waste Recycling and Organics Processing Facility

7Allocation of Parks Levy Funds - Harbourfront Parks Improvement(Ward 24 - Downtown)

8510 Spadina - Roadway Changes to Improve Safety(Downtown)

9Window Improvement Project - Toronto City Hall

10System Standardization for Housing

11Financial Impacts from OMERS Surplus Position

12May 1998 Capital Budget Variance Report

13Implementation of a 100 Percent Bio-Solids Beneficial Reuse Program at the Main Treatment Plant

14Other Items Considered by the Committee

City of Toronto

REPORT No. 16

OF THE STRATEGIC POLICIES AND PRIORITIES COMMITTEE

(from its meeting on July 29, 1998,

submitted by Mayor Mel Lastman , Chair)

As Considered by

The Council of the City of Toronto

on July 29, 30 and 31, 1998

1

Sale of Surplus Spadina Project Property

- 151 Everden Road (Ward 28 - York Eglinton)

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the following report (July 24, 1998) from the Commissioner of Corporate Services:

Purpose:

To authorize the disposal of the property municipally known as 151 Everden Road, City of Toronto.

Funding Sources, Financial Implications and Impact Statement:

Revenue of $229,900.00 less closing costs and the usual adjustments, subject to the revenue sharing agreement with the Province pursuant to the former Metropolitan Corporate Administration Committee Report No. 25, Clause No. 1, approved on December 4, 1996.

Recommendations:

It is recommended, subject to Provincial concurrence that:

(1)the Commissioner of Corporate Services be authorized to accept the highest offer in the amount of $229,900.00 as detailed herein;

(2)Council, pursuant to Clause No. 14, of Report No. 27 of the former Metropolitan Management Committee adopted on September 28, 1994, waive the minimum required deposit of 10 per cent. of the purchase price;

(3)authority be granted to direct a portion of the sale proceeds on closing to fund the outstanding balance of Costing Unit No. CP300J56164;

(4)the City Solicitor be authorized and directed to take the appropriate action, in conjunction with Province of Ontario Officials and/or agents, to complete the transaction on behalf of the Corporation and he be further authorized to amend the closing date to such earlier or later date as he considers reasonable; and

(5)the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

The Province of Ontario is the owner of 151 Everden Road, subject to a ninety-nine year lease in favour of the City of Toronto. By its adoption of Clause No. 1 of Report No. 3 of The Corporate Administration Committee on February 12 and 13, 1997, Metropolitan Council declared the property surplus pursuant to By-Law No. 56-95 and authorized its disposal. The procedures with respect to By-Law No. 56-95 have been complied with, a utility canvass has been completed and an easement requirement in favour of the City of Toronto for subway/sewer purposes has been identified and will be reserved.

Comments and/or Discussion and/or Justification:

Pursuant to the February 12 and 13, 1997 authority, the property was listed with HomeLife/City Hill Realty Inc. on April 28, 1998 at an asking price of $229,900.00. As a result, the following offer was received and is now recommended for acceptance:

Property Address:151 Everden Road, City of Toronto

Legal Description:South 25 feet of Lot 67, Plan 1103, City of York

Lot Size:7.62 metres (25 feet) fronting onto Everden Road

40.2 metres (132 feet) depth

Location:East side of Everden Road, south of Eglinton Avenue West

Improvements:Detached, 1.5-storey, brick dwelling

Occupancy Status:Vacant

Recommended Sale Price:$229,900.00

Deposit:$11,495.00

Purchaser:Ailis Hylton and Anthony Hylton

Closing Date:October 15, 1998

Terms:Cash on closing, subject to the usual adjustments.

Listing Broker:HomeLife/City Hill Realty Inc.

Selling Broker:Bosley Real Estate

Commission:Four (4) per cent, plus G.S.T., payable on closing of the transaction.

Conclusions:

Completion of this transaction detailed above is considered fair and reasonable and reflective of market value.

For the information of your Committee and Council, this report has been addressed to the Strategic Policies and Priorities Committee as opposed to the Corporate Services Committee in order to obtain the necessary authority to accept the Agreement of Purchase and Sale prior to the August 5, 1998 irrevocable date set out in the purchaser's offer.

Contact Name:

Mr. R. Mayr, AACI, Director, Real Estate Services, (416)396-4930, Fax No.: (416)396-4241, E-Mail Address: mayr@city.scarborough.on.ca (cs98137.wpd)

Insert Table/Map No. 1

151 everden

2

Amendment to Agreement to Facilitate the Expansion of

Access Rights to Municipal Road Allowances

- Metronet Communications Group Inc. - Supplementary Report

(City Council on July 29, 30and 31, 1998:

(1)adopted the following:

"It is recommended that:

(a)the report (July 24, 1998) from the Commissioner of Works and Emergency Services embodying the following recommendations, be adopted subject to the expansion of the Metronet Agreement being conditional upon the non-disclosure clauses not applying to other municipalities or the Federation of Canadian Municipalities; and subject also to the Agreement being approved for access to the City's boulevards only, not for watermains:

'It is recommended that:

(1)the recommendations contained in the June 30, 1998 report on this subject be superseded by the following recommendations;

(2)City Council authorize an amendment to the Agreement with Metronet Communications Group Inc. to allow Metronet to enter upon the Public Highways under the jurisdiction of the City of Toronto beyond the bounds of the former Toronto city limits, for the purposes of installing, maintaining and operating a fibre optic telecommunications network throughout the City;

(3)the amended Agreement with Metronet contain such terms and conditions as have been negotiated and agreed to between the parties and described generally in the June 30, 1998 report on this subject, and approved by City Council, and such other terms and conditions as may be satisfactory to the Commissioner of Works and Emergency Services and the City Solicitor to protect the interests of the City;

(4)the Commissioner of Works and Emergency Services, in consultation with the City Solicitor, report on the expansion of the Standard Form Municipal Access Agreement as previously authorized by the former City of Toronto and Metropolitan Councils to apply throughout the entire new City area, in order to enable qualified individuals or companies to access public street allowances for the purposes of installing, maintaining and operating telecommunications systems; and

(5)with regard to the leasing of spare City-owned conduit capacity, the Commissioner of Works and Emergency Services ensure that an appropriate public tender mechanism is utilized and that potential for access by other qualified individuals or companies is maintained where technically feasible;';

(b)the Commissioner of Works and Emergency Services be requested to report to the Works and Utilities Committee on recommendations for other potential agreements for use in other City assets to install fibre optic cables;

(c)the Chief Administrative Officer be requested to report to Council, through the Economic Development Committee, no later than December, 1998, on the desirability, structure and Terms of Reference for a telecommunications authority for the City of Toronto; and

(d)the City Solicitor be requested to review whether the Agreement with Metronet should include a waiver of their rights under Section 220.1 (the 'user fee' provisions) of the Municipal Act."; and

(2)referred the following motion to the Chief Administrative Officer for a report thereon to the appropriate committee:

Moved by Councillor Fotinos:

"That no other telecommunications Network Agreement with a term longer than five years be signed until a telecommunications authority has been established.")

The Strategic Policies and Priorities Committee submits the report (July 24, 1998) from the Commissioner of Works and Emergency Services and the report (June30, 1998) from the Commissioner of Works and Emergency Services addressed to the Works and Utilities Committee, and the confidential report (July 14, 1998) from the City Solicitor addressed to the Works and Utilities Committee, which was forwarded to Members of Council under confidential cover, without recommendation.

The Strategic Policies and Priorities Committee submits the following report (July 24, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

This report is supplementary to the June 30 report on this subject which was considered by the Works and Utilities Committee at its meeting of July 15, 1998.

Funding Sources, Financial Implications and Impact Statement:

The proposal will result in enhanced revenue generation potential to the City from accelerated revenues related to the permission granted to Metronet to access the road allowances. No costs to the City are involved.

Recommendations:

(1)That the recommendations contained in the June 30, 1998 report on this subject be superseded by the following recommendations.

(2)That City Council authorize an amendment to the Agreement with Metronet Communications Group Inc. to allow Metronet to enter upon the Public Highways under the jurisdiction of the City of Toronto beyond the bounds of the former Toronto city limits, for the purposes of installing, maintaining and operating a fibre optic telecommunications network throughout the City.

(3)That the amended Agreement with Metronet contain such terms and conditions as have been negotiated and agreed to between the parties and described generally in the June 30, 1998 report on this subject, and approved by City Council, and such other terms and conditions as may be satisfactory to the Commissioner of Works and Emergency Services and the City Solicitor to protect the interests of the City.

(4)That the Commissioner of Works and Emergency Services, in consultation with the City Solicitor, report on the expansion of the Standard Form Municipal Access Agreement as previously authorized by the former City of Toronto and Metropolitan Councils to apply throughout the entire new City area, in order to enable qualified individuals or companies to access public street allowances for the purposes of installing, maintaining and operating telecommunications systems.

(5)That with regard to the leasing of spare City-owned conduit capacity, the Commissioner of Works and Emergency Services ensure that an appropriate public tender mechanism is utilized and that potential for access by other qualified individuals or companies is maintained where technically feasible.

Comments:

As a result of the Works and Utilities Committee's review of the June 30 report on expanding access to the City's municipal road allowance, it has become clear that the recommendations of the report require re-statement and clarification. The revised recommendations more clearly confirm the City's intent to ensure that there is a fair and appropriate access to all parties willing to enter into the Standard Form Municipal Access Agreement for the purposes of entering the City's public street allowances for telecommunication systems. To ensure that the recommended rates for use of spare City-owned conduit capacity are appropriate and available to as many third parties as technically feasible, a public tender mechanism will be utilized.

Contact Name and Telephone Number:

Andrew Koropeski, Director

Infrastructure Planning and Transportation Division

392-7711

The Strategic Policies and Priorities Committee also submits the following report (June30,1998) from the Commissioner of Works and Emergency Services:

Purpose:

To authorize an amendment to the current agreement between Metronet Communications Group Inc. and the (former) City of Toronto for the purposes of installing, maintaining and operating a fibre optic telecommunications network, in order to encompass the entire new City of Toronto area.

Funding Sources, Financial Implications and Impact Statement:

The proposal will result in enhanced revenue generation potential to the City in the form of lease payments for City conduits and accelerated revenues related to the permission granted to Metronet to access the road allowances. No costs to the City are involved.

Recommendations:

(1)That City Council authorize an amendment to the Agreement with Metronet Communications Group Inc. to allow Metronet to enter upon the Public Highways under the jurisdiction of the City of Toronto beyond the bounds of the former Toronto city limits, for the purposes of installing, maintaining and operating a fibre optic telecommunications network throughout the City and renting spare City duct capacity, subject always to the City's requirements and permissions for construction within the street allowance; and

(2)That the amended Agreement with Metronet contain such terms and conditions as have been negotiated and agreed to between the parties and described generally in this report, and approved by City Council, and such other terms and conditions as may be satisfactory to the Commissioner of Works and Emergency Services and the City Solicitor to protect the interests of the City.

Background:

Metronet Communications Group Inc. has approached City staff with a request to expand the terms and conditions of its current Agreement entered into with the former City and Metropolitan Toronto Councils which authorizes the firm to install, maintain and operate a fibre optic telecommunications network on public road allowances. Currently focussed on the downtown core, Metronet seeks permission to extend its network within municipal road allowances beyond the former Toronto city limits which represents the present scope of the Agreement.

Comments:

Introduction

Upon evaluation of submissions received in response to a Request for Proposals (RFP) the former City of Toronto Council, at its meeting of June 23 and 24, 1997 authorized an agreement between Metronet Communications Group Inc. and the City involving:

(i) a lease of a decommissioned high pressure watermain system in the downtown core and other City-owned decommissioned pipe located within the (former) City of Toronto, in accordance with the RFP, for the purposes of installing, maintaining and operating a high speed fibre optic telecommunications network and sub-leasing space for third party-owned cables within the pipes; and

(ii) a licence by way of a Municipal Access Agreement to allow Metronet to enter upon the Public Highways under the jurisdiction of the (former) City of Toronto for the purposes of installing, maintaining and operating the network throughout the City, subject to the City's requirements and permissions for construction within the street allowance.

The Agreement sets out the parties' rights and obligations related to such work and includes a comprehensive compensation package to the City with substantial direct revenues accruing. The Metropolitan Toronto Council, at its meeting of August 13 and 14, 1997, among other things, approved the installation of the telecommunications network within the limits of Metro roads located in the former City.

As part of its overall plan to expand its services in 1998 and beyond, Metronet Communications Group, Inc. has indicated that it wishes to proceed with installation of its fibre optic network beyond the downtown area and into other areas of Toronto.

Assessment

The expansion of the fibre-optic network by Metronet to various areas of the City is a positive development, in that the objective of encouraging a competitive, technologically advanced telecommunications infrastructure to benefit area businesses is supported. The build plans for 1998 submitted by Metronet suggest a backbone route that will loop through the Don Valley/Don Mills Road corridor to Consumers Road in the East York and North York communities, to the North York Centre area along Sheppard Avenue, connecting downtown via the Yonge Street corridor. New construction will not necessarily be required along the entire route, as other options such as spare Bell or City conduit, abandoned gas mains or Hydro pole attachments will be explored.

In general, the terms and conditions of the present agreement are readily applicable to the expanded geographic area, with certain minor amendments. A brief synopsis of the current agreement terms is provided in Appendix A, attached. As Council is aware, the current agreement contains a comprehensive compensation package to the City with substantial direct revenues accruing. Staff have taken the view that the additional rights and opportunities afforded to Metronet through expanding its area of operation should be accompanied by enhanced value to the City.

In respect of the value associated with the access rights for the road allowance two aspects have been negotiated. First, the proportion of gross revenues payable annually would be expanded to be applicable to the revenues generated throughout the entire expanded area of the City. Second, the minimum annual prepayment amount would be increased. Specifically, the component of the agreement calling for an annual minimum payment would be increased by 15 percent. Of course, at such time as the gross revenue share exceeds this minimum amount, the gross revenue formula would be applicable.

Other minor changes will need to be incorporated in order to amend the agreement. These include mainly definitional items to reflect the expanded boundaries and new City corporate structure, and certain conditions related to the varying and evolving permitting procedures. As well, Metronet and City staff will have to review the provisions of the form of Sublease which Metronet is required to use when subleasing City-owned pipe under the Agreement so as to ensure that it remains consistent with the main Agreement.

Use of Spare City-owned Conduit Capacity

Through their technical assessment, Metronet has identified various options available to complete their network extension as set out above. One of these involves the use of spare capacity in certain City-owned traffic control system duct and conduit structures. Staff are recommending that authority be granted to enter into an agreement with Metronet for the rental of such space, coinciding with the term of lease of the underground watermain system. The general terms and conditions proposed are as follows:

Annual Rental fees- Don Valley Parkway/Highway 401/Freeway routes - $5.00 per metre

- Lake Shore Boulevard route - $5.00 per metre

- Don Mills Road/Yonge Street/Arterial routes - $10.00 per metre

Technical- Where the RESCU system has only 1 spare duct, Metronet is responsible for installing a separate fibre cable supplied by the City, at no costs to the City. This installation would include, but not be limited to sections along Lake Shore Boulevard and the Don Valley, among others, as determined by the General Manager, Transportation Services.

Metronet and the City would jointly locate and inspect the portions of duct to be used by Metronet and any clearing or refurbishing required for Metronet's purposes would be at no cost to the City.

Conclusions:

The proposal by Metronet Communications Group Inc. to expand the scope of their current agreement in order to enable installation of an extended telecommunications network throughout the City of Toronto is a positive initiative for the proponents and the City in terms of facilitating the deployment of a current, competitive telecommunications infrastructure to areas not presently enjoying such options.

The terms and conditions of the current agreement, which was authorized by both the former City and Metropolitan Toronto Councils in 1997, are readily applicable to the expanded geographic area, with certain minor amendments as set out in this report. The amended conditions negotiated which expand Metronet's opportunities will also enhance the City's revenue generation potential over and above the substantial direct revenues accruing under the terms of the current agreement. More particularly the City's share of gross revenues will be calculated on the basis of the total revenues generated in the larger geographic area. As well the minimum annual payment will be increased on the basis of an agreed-upon factor of 15 percent over and above the value in the current Agreement.

Contact Name and Telephone Number:

Andrew Koropeski, Director

Infrastructure Planning and Transportation Division

392-7711

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Appendix A:Summary of Terms and Conditions of current Agreement between Metronet Communications Group and City of Toronto

Lease of the Decommissioned Watermain System

The Agreement grants Metronet exclusive rights to the use and occupancy of the decommissioned pipe system in the downtown core, as was the intent of the RFP, subject to the third party provisions discussed below. The company, at its sole cost prepares the portions of the system (refurbish, clean, install inner duct and other facilities such as maintenance holes, etc.) for its own and third party use for the implementation of fibre optic systems. The company will maintain and manage the pipe system throughout the term of the Agreement.

Lease Revenues

The Agreement calls for the City to receive revenues from 3 basic component sources related to the pipe system. It should be noted that all revenues are subject to annual adjustment based on the Consumer Price Index. (Staff would be pleased to advise Councillors of the details of the business arrangements at an in-camera session, as non disclosure provisions in the Agreement do not permit us to release these figures.)

i) One time lump sum and annual fixed fee

ii) Fees per Metre for Metronet-owned Cable

iii) Fees per Metre for Third Party Users

Over the first 5 years, substantial portions of the lease revenues to the City are guaranteed.

With respect to the mechanisms for payment, consolidated network and third party plans are to be submitted to the City 2 months prior to each anniversary date for the purpose of calculating cable installation. The City has rights to permit auditors to inspect all financial records, contracts, accounts, etc., for the purposes of verifying Metronet's calculations and payments. Any such information is proprietary and confidential, subject to the Municipal Freedom of Information and Privacy Act.

Provision of Dark Fibre and/or Preferred Service Rates for City Use

Further compensation to the City is provided by a grant of dark fibre for its own current and future telecommunications and information systems purposes for a nominal one-time amount. More specifically, dark fibre strands are to be provided, up to the length of the Metronet fibre backbone, in locations where and when the City specifies. The City would be responsible for the cost of lateral connections to the main pipe, however, Metronet is responsible for ongoing maintenance of the dark fibre and laterals. The City has the option of requesting that Metronet construct the laterals at cost or may construct its own lateral connections, provided that Metronet does the actual connections to the backbone portion of the system.

The company has also included an offer to the City for the provision of " lit" fibre services at terms reflecting "the best industry price".

Performance Requirements

One of the primary goals of the City is to ensure that the successful proponent did in fact deliver a viable telecommunications system in the abandoned pipe structure and not simply purchase this asset to "lock-out" potential competitors. The financial guarantees in the Agreement provide a strong incentive for Metronet to install a legitimate telecommunications network. In addition, provisions have been included to either guarantee or further encourage levels of performance based on installed cable.

With respect to third party cable installation, Metronet is to a very large extent dependent on the market. In this regard, the City agreed to the third party rate structure to ensure that prohibitive pricing is not employed, as well as to the terms and conditions of the standard sub-lease. Further, Metronet agreed to provide funding for a joint City/company third party marketing effort to attract third parties to sub-lease the system if specified targets are not met.

Third Party-Sub-Lease of the Pipe System

It is the City's intent to encourage competition in the telecommunications market in Toronto. This is explicitly acknowledged in the Agreement and will be facilitated by permitting other parties to sub-lease spare innerduct capacity in the underground pipe system. Pursuant to the RFP, Metronet, being the lessee of the pipes and hence manager of this asset, is required to accommodate other telecommunications providers. Metronet is entitled to use for its purposes a maximum of 40 percent to 50 percent (two of 4 or 5 innerducts), with the remaining being available to third parties. Any single third party operator would be permitted a maximum of two innerducts as well. To ensure that third parties are also actually using this space for its intended use, the City has the option to require the termination of any sub-lease if the third party has not lit its fibre within 6 months of the fibre being ready for use. A sub-lease agreement to be entered into by Metronet with third parties is included as a Schedule to the Agreement. Any substantive changes to the terms and conditions including fees charged require the City's concurrence.

Third Party Charges - It is reasonable and fair that Metronet recover its costs related to the pipe system, and third parties not expect to use the system at more favourable rates than Metronet. The rate to be charged to third parties for use of pipe Metronet would have already refurbished is comprised of 3 components:

- per metre cable fee to the City for use of the pipes.

- per metre cable fee representing one-third (assuming Metronet occupancy plus 2 third parties) of the refurbishment cost to Metronet.

- per metre cable fee to the City, representing a proportion of the annual fixed fee for access rights to the public streets.

In the event that a third party wishes to use a portion of the pipe system that Metronet has not refurbished, the third party would pay the actual costs. If subsequently either Metronet or another third party were to enter these refurbished pipes, the original company would be reimbursed the appropriate portion of its costs. Metronet will also charge an annual maintenance fee prorated on the basis of actual costs. Installation of third party plant within the system will be done by Metronet at cost, or there are provisions to allow qualified third parties or their qualified contractors to undertake the work under Metronet inspection. Metronet will be the sole party to perform any necessary works on the pipe structure.

Construction and Workmanship Responsibilities

Metronet is not permitted to occupy any portion of the public highway whatsoever for any purpose other than the design, construction, operation and maintenance of a high speed fibre optic system. Their use of the public highway is under the same conditions as any other private entity or utility. They have to apply for and obtain a street allowance construction permit, street occupation permit, pavement cut permit and public utility coordinating committee approval. Compliance and observance of all statutory requirements, rules, regulations and by-laws is also required and is their responsibility to secure. Work methods have to conform with standard City of Toronto construction guidelines and specifications including any requirements for the installation of underground services. Further, upon completion of any construction, installation, maintenance or operation of the data system, the public highway will be restored to a safe and proper condition to the satisfaction of the Commissioner of Works and Emergency Services.

All permit fees are to be borne by Metronet. Likewise, revenues accruing to the City under the lease or MAA will be exclusive of all charges or expenses, including license fees, the goods and services tax, provincial sales tax, tariffs including and not limited the gross receipts tax, applicable at the time of execution of the agreement and any future taxes, charges or tariffs which may arise from any jurisdiction and will not be drawn down or credited against any payments owed by Metronet to the City.

Metronet will pay any costs incurred by the City or a utility company for the construction, maintenance or repair of its facilities damaged or disturbed arising from the implementation, operation or abandonment of the network. Infrastructure installed and operated by Metronet which interferes with other services located within the highway may be removed and/or relocated at the discretion of the Commissioner at the expense of Metronet.

Metronet has obtained valid public liability and property damage insurance showing the types of coverage, the amounts and the effective dates of insurance, satisfactory to the City Solicitor. The City is named as an additional insured party in the policy. The insurer will have to provide the City with 30 days notice of any amendment, revocation or cancellation of insurance.

Access Licence

The Agreement with Metronet contains provisions to allow the company to enter onto and install plant within the former City of Toronto's public highways beyond the pipe system, subject to specified terms and conditions. The access provisions granted to Metronet work in tandem with the lease provisions.

In exchange for the benefit of having access to the City's public highways, Metronet has agreed to pay to the City an annual amount equivalent to a percentage of its gross revenues as defined, and adjustments related to the lease component. The amount is consistent with or better than the agreements being achieved in other Canadian jurisdictions (Vancouver, Edmonton). It is recognized that the industry is in a state of considerable flux and expansion, and staff were concerned throughout that although this is currently an appropriate level of compensation, flexibility must be maintained to reflect emerging trends in the marketplace throughout the term of the Agreement. Certain protections in this regard have been incorporated.

(Councillor Giansante, at the meeting of City Council on July 29, 30 and 31, 1998, declared his interest in the foregoing Clause, in that his wife is an employee of Bell Canada.)

3

Implications of Year 2000 Computer Compliance Issues

- Extension of Contract No. T-27-96 - Maintenance of Traffic

and Related Devices

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendation embodied in the transmittal letter (June 17, 1998) from the City Clerk wherein it is recommended that:

"Contract No. T-27-96 with Stacey Electric Company Limited be extended from January1, 1999, to December 31, 1999, under the terms and conditions of the original contract, by exercising the "Option of Extension" clause (Part C, Section15)."

Background:

The Budget Committee on July 28, 1998, had before it the following:

(1)report dated July 8, 1998 from the Executive Director, Information and Technology, Corporate Services;

(2)transmittal letter dated June 17, 1998 from the City Clerk forwarding a report dated May 26, 1998 regarding the Extension of Contract No. T-27-96: Maintenance of Traffic Control and Related Devices; and

(3)report dated July 17, 1998 from the General Manager, Transportation Services regarding the Extension of Contract No. T-27-96: Maintenance of Traffic Control and Related Devices and Year 2000 Computer Compliance Issues - Supplementary Report No. 2.

--------

(Report dated July 8, 1998, addressed to the Budget Committee,

from the Executive Director, Information and Technology, Corporate Services)

Purpose:

The purpose of this report is to discuss the Year 2000 computer compliance issue in connection with the decision of the Urban Environment and Development Committee to recommend the extension of Contract No. T-27-96 - Maintenance of Traffic Control and Related Devices.

Funding Sources:

It is estimated that the Transportation Services Division of the Works and Emergency Services Department will require approximately $700,000.00 to make the necessary modifications and replacements to the traffic control computer systems and equipment to ensure Year 2000 compliance.

Recommendations:

It is recommended that:

(1)Contract No. T-27-96 not be amended to include the activities required to ensure that the traffic control computer systems and equipment are Year 2000 compliant; and

(2)the Transportation Services Division, Works and Emergency Services Department present a report in September, 1998 identifying the total costs required to ensure Year 2000 compliance of traffic control computer systems and equipment.

Background:

The Budget Committee on June 25,1998, had before it a transmittal letter (June 17,1998) from the Urban Environment and Development Committee regarding the extension of Contract No. T-27-96 - Maintenance of Traffic Control and Related Devices.

The Budget Committee on June 25,1998, referred the matter to the Year 2000 Project Office for a report to Budget Committee on July 13, 1998 on whether a new contract can be issued which would incorporate, through a regular maintenance program, the conversion necessary for the Year 2000 project.

Discussion:

Staff of the Works and Emergency Services Department, Transportation Services Division, began work in 1997 on assessing the impacts of the Year 2000 issue on the traffic control systems. The City of Toronto operates a number of traffic control systems, which all consist of two elements; namely, traffic control computer systems and field equipment. The following is a summary of the Year 2000 issues affecting these two elements.

(A)Traffic Control Computer Systems

In total there are five traffic control computer systems.

(1)Road Emergency Service Communications Unit (RESCU)

(2)Main Traffic Signal System (MTSS)

(3)Arterial Master Signal System (AMSS)

(4)SCOOT/UTC System, Version 7

(5)SCOOT/UTC System, Version 16

The first two systems have been tested and proven to be Year 2000 compliant. The AMSS system will be undergoing a Year 2000 upgrade within the next month provided by the vendor as part of the original supply contract, and testing will follow shortly thereafter. The supplier of the SCOOT Version 16 system has provided documentation showing Year 2000 compliance. The SCOOT Version 7 system, which currently controls 44 signalized intersections, cannot be made Year 2000 compliant and a conversion to the newer SCOOT Version 16 system is required. The SCOOT Version 16 system is also scheduled for testing in July of 1998 to confirm the supplier's commitment that it is Year 2000 compliant. In this case, Transportation Services is protected by a comprehensive maintenance agreement to cover any necessary Year 2000 upgrades.

The costs to replace the SCOOT Version 7 with the Year 2000 compliant version will be approximately $500,000.00. This includes the specialized requirements of all central computer and field controller equipment. This work will need to begin this Fall in order to ensure that the system is converted in time.

(B)Field Equipment

At signalized intersections, the traffic signals are operated by traffic controllers located at the intersection. Other than during maintenance periods and emergencies, the controllers receive instructions from the central traffic control computer systems, which have been discussed previously. During these maintenance and emergency periods (which have a significant impact, especially after storms), the traffic signals are operated by the local traffic controllers. Some of these controllers include timeclocks and therefore must be tested for Year 2000 compliance. Communications with our suppliers, along with independent testing of the field equipment, has revealed minor problems with several of the types of controllers in use at some signalized intersections. Formal estimates of cost to correct these problems have yet to be confirmed, but these expenses are believed to be within $100,000.00.

Secondary systems, communications and controller equipment and off-line application software tools are also being investigated for Year 2000 compliance. However these investigations are still at a preliminary stage and final estimates of potential problems and or costs have yet to be compiled in this area. However the expenses are believed to be within $100,000.00. Transportation Services staff will complete the tests and report on any problems concerning these secondary elements and any additional efforts and costs to achieve Year 2000 compliance by September, 1998.

Implications for Maintenance of Traffic Control and Related Devices Contract

Contract No. T-27-96 provides for the maintenance of traffic control and related devices, namely the maintenance of traffic control signal hardware at intersections, pedestrian crossovers on major roads, sign installation on major roads, and incidental pavement markings. The services at traffic control signal intersections include conflict monitor checks, annual re-lamp, hardware replacement and emergency response.

The maintenance of the traffic control computer systems is currently outside the scope of this contract. Transportation Services staff manage the proprietary systems by dealing with the suppliers directly, in order to minimize costs and simplify accountability. Similarly, the purchase of traffic signal controllers is currently outside the scope of this contract for the same reasons. Hence, Year2000 compliance issues fall outside the scope of Contract No. T-27-96.

Conclusions:

The total funding required for making Year 2000 changes to traffic control systems and field equipment will be known by the Transportation Services Division in September 1998. Staff will report at that time and identify the funds which should be allocated to the Transportation Services Division to address this issue.

Substantial effort would be required to prepare a tender which would include Year 2000 compliance components in the maintenance contract. There are no demonstrated advantages to including such components in the maintenance contract. Therefore, the Year 2000 compliance should be dealt with outside the scope of the maintenance contract.

Contact Name:

Ron Stewart, Senior Manager

Traffic Systems

(416) 397-7592

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(Transmittal letter dated June 17, 1998, addressed to the Budget Committee

from the Urban Environment and Development Committee)

Recommendation:

The Urban Environment and Development Committee on June 15 and 16, 1998 recommended to the Budget Committee, the Strategic Policies and Priorities Committee, and Council the adoption of the report (May 26, 1998) from the Interim Functional Lead, Transportation, wherein it is recommended that:

"Contract No. T-27-96 with Stacey Electric Company Limited be extended from January1, 1999, to December 31, 1999, under the terms and conditions of the original contract, by exercising the "Option of Extension" clause (Part C, Section15)."

The Urban Environment and Development Committee reports, for the information of the Budget Committee, the Strategic Policies and Priorities Committee, and Council, having requested the General Manager, Transportation Services, to:

(a) consult with employee groups during the development of the consolidated service delivery plan; and

(b)submit a report to the Urban Environment and Development Committee with regard to the details of the tendering specifications, prior to re-tendering.

Background:

The Urban Environment and Development Committee had before it a report (May 26, 1998) from the Interim Functional Lead, Transportation recommending that Contract No. T-27-96 with Stacey Electric Company Limited be extended from January 1, 1999, to December 31, 1999, under the terms and conditions of the original contract, by exercising the "Option of Extension" clause (Part C, Section15); advising that Contract No. T-27-96 was issued as a two-year contract from January 1, 1997 to December 31, 1998, with two one-year extensions in 1999 and 2000, each of which requires the approval of Toronto City Council; that the Contract was written in this way to achieve cost savings in the area of maintenance of traffic control devices, while maintaining the quality of maintenance work; stating that these benefits have been experienced with the current electrical contractor, Stacey Electric Company Limited; and that the funds for the activities included within this Contract will be contained in the Works and Emergency Services Current Budget estimates for 1999.

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(Joint report dated May 26, 1998, addressed to the Urban Environment and Development Committee

from the Interim Functional Lead, Transportation, and the Commissioner of Works and Emergency Services)

Purpose:

To extend by one year the contract for the maintenance of traffic control and related devices -Contract No. T-27-96.

Funding Sources:

The funds for the activities included within this contract will be contained in the Works and Emergency Services Current Budget estimates for 1999.

Recommendation:

It is recommended that Contract No. T-27-96 with Stacey Electric Company Limited be extended from January 1, 1999 to December 31, 1999, under the terms and conditions of the original contract, by exercising the "Option of Extension" clause (Part C, Section 15).

Background:

Contract No. T-27-96 encompasses the maintenance of all traffic control signals within the boundary of the new City of Toronto; and all pedestrian crossovers and illuminated signs on major arterials which were formally Metro roads. It also includes sign installation and a small element of pavement markings on major arterials.

Contract No. T-27-96 was issued as a two-year contract from January 1, 1997 to December 31, 1998, with two one-year extensions: 1999 and 2000. Each extension requires the approval of Toronto City Council.

Discussion:

Considerable staff time and effort was spent in 1995 and early 1996 to research and re-write our municipal traffic plant maintenance tender. The three principal objectives were as follows:

(1)to provide greater accessibility for contractors by reducing the barriers to bidding, through the size, scope and duration of the contract;

(2)to provide incentives for contractors to deliver their services at a lower cost to the municipality; and

(3)to provide a contract structure which is manageable and contract services which are efficiently co-ordinated.

The result was a brand new tender which fundamentally changed the structure and administration of the historical traffic plant maintenance contract.

One of the primary innovations was the change from a "time and materials" base to a "set price" performance base. The new contract provides a fixed fee per intersection to the contractor to maintain the traffic control signals, rather than paying for each visit to the site. Therefore there is an incentive for the work to be of high quality and performed as efficiently as possible, to avoid repeated site visits by the contractor.

In order to provide for the opportunity for smaller contractors to compete, the tender was organized into three districts, which lowered the financial obligation required and the potential investment in equipment and vehicles. In order to fully realize the benefits of their investment, it was understood that the contract should be three or four years long. However, because of fundamental changes to the previous contract, it seemed prudent to provide both the City and the contractor with an option to terminate the contract after two years if it was not working. The expectation amongst staff and contractors was that the "Option of Extension" would be exercised by both parties if the quality of work was good, if the anticipated savings materialized, and if the savings could be sustained by extending the contract.

The significant effort applied to rewrite the tender has provided the benefits which staff had hoped for. Not only is the quality of work being performed as prescribed in the contract, the cost of electrical maintenance in 1997 was 13 percent less than in 1996, a saving of over $600,000.00.

When Contract No. T-27-96 was awarded in 1996, bids were received from three contractors and the contract was awarded to the lowest bidder, Stacey Electric Company Limited. The annual total bid prices submitted were as follows:

Stacey Electric$4,033,072.00

Guild Electric$4,514,406.00

Cliffside$12,692,272.00

Stacey Electric Company Limited have agreed to an extension of the contract with no increases to the current bid prices, and under the terms of the existing contract. Therefore staff recommend that Contract No. T-27-96 with Stacey Electric Company Limited be extended from January 1, 1999 to December 31, 1999.

The one-year extension lends itself to the on-going amalgamation process. The current contract is based on three districts, but, as a result of amalgamation, the number and area of each district will be different. Secondly, maintenance of traffic plant under the jurisdiction of the former municipalities is currently delivered through a combination of in-house and contracted out service arrangements. Therefore, a consolidated service delivery plan will be developed in 1998 and a tender re-write will be undertaken early in 1999 to prepare for the new service delivery requirements in the year 2000.

Conclusions:

Contract No. T-27-96 was written in order to achieve cost savings in the area of maintenance of traffic control devices, while maintaining the quality of maintenance work. These benefits have been experienced with the current electrical contractor, Stacey Electric Company Limited, and staff recommend that the contract be extended by one year according to the provisions of the contract.

Contact Name:

Peter K. Hillier, Senior Manager, Traffic Regions,

Tel. No. 416-392-5348.

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(Joint report dated July 17, 1998, addressed to the Budget Committee, from the General Manager,

Transportation Services and the Commissioner of Works and Emergency Services)

Purpose:

The purpose of this report is to clarify the relationship between Year 2000 Compliance Issues and the Extension of Contract No. T-27-96 - Maintenance of Traffic Control and Related Devices.

Funding Sources:

It is estimated that the Transportation Services Division of the Works and Emergency Services Department will require approximately $700,000.00 to make the necessary modifications and replacements to the traffic control computer systems and equipment to ensure Year 2000 compliance.

Recommendations:

It is recommended that this report be received for information.

Background:

On June 25, 1998, the Budget Committee had before it a transmittal letter (June 17, 1998) from the Urban Environment and Development Committee regarding their recommended extension of Contract No. T-27-96 - Maintenance of Traffic Control and Related Devices.

The Budget Committee on June 25, 1998, referred the matter to the year 2000 Project Office for a report to Budget Committee on July 13, 1998 on whether a new contract can be issued which would incorporate, through a regular maintenance program, the conversion necessary for the year 2000 project.

On July 13, 1998, the Budget Committee deferred consideration of this matter until their July 28, 1998 meeting.

Discussion:

In a report to the Urban Environment and Development Committee (UEDC) dated May 26, 1998, Transportation Services staff discussed the one-year extension of Contract No. T-27-96, the Maintenance of Traffic Control and Related Devices, to the end of 1999. This extension was recommended by UEDC at their June 15, 1998 meeting.

At the request of the Budget Committee, Lana Viinamae, Year 2000 Project Executive, discussed the issues of Year 2000 computer compliance as they relate to traffic control computer systems and equipment, in a report dated July 8, 1998. One conclusion within that report is that substantial effort would be required to prepare a tender which would include Year 2000 compliance components in the maintenance contract, and there are no demonstrated advantages to including such components in the maintenance contract. Therefore, the Year 2000 compliance should be dealt with outside the scope of the maintenance contract.

In order to further clarify the absence of relationship between the Year 2000 compliance work and the maintenance contract, staff wish to reiterate that the maintenance contract encompasses routine repair, inspection and replacement activities at traffic control signals and pedestrian crossovers, as well as sign installation on major roads and incidental pavement markings.

The identification of the required hardware and software replacement acquisitions, as well as the specialized services required to undertake the Year 2000 compliance work, are outside the scope of the maintenance contract. The most cost-effective method of attaining Year 2000 compliance will be accomplished through a process other than the extension of Contract No. T-27-96.

Conclusions:

Contract No. T-27-96 should be extended for one year to the end of 1999. Staff should report back in September identifying the funds which should be allocated to the Transportation Services Division to address the issue of Year 2000 compliance, and whether the compliance activities will be best undertaken by in-house staff or contracted services, or a combination thereof.

Contact Name and Telephone Number:

Peter Hillier, Senior Manager

Traffic Regions, (416) 392-5348

4

Request for Proposal for Use of Consultants in

Office and Civic Space Consolidation

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the recommendations embodied in the reports (July 12, 1998 and July24, 1998) from the Commissioner of Corporate Services be struck out and substituted with the following:

(1)that funding in the amount $210,000.00 gross be approved for the hiring of outside consultants for the Office and Civic Space Consolidation, subject to the Chief Administrative Officer reviewing the Response For Proposals with the Chair of the Budget Committee prior to awarding of the contract; and

(2)that funding in the amount of $200,000.00 be approved for the Yards Property Study and staff be requested to proceed with the Response For Proposals process and the contract not be awarded until such time as the results of this process are approved by the Budget Committee at its meeting of September 15, 1998.

Background:

The Budget Committee had before it the following reports:

(1)(July 24, 1998) from the Commissioner of Corporate Services regarding a request for proposal for use of consultants in office and civic space consolidation; and

(2)(July 12, 1998) from the Commissioner of Corporate Services regarding the use of consultants in City Hall relocations.

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(Report dated July 24, 1998, addressed to the Budget Committee,

from the Commissioner of Corporate Services)

Purpose:

To provide the Budget Committee with further information about the Request for Proposals for the use of consultants in the Office and Civic Space Consolidation exercise.

Funding Sources, Financial Implications and Impact Statement:

An allocation of $710,000.00 for consulting fees is included within the two Facilities Management transition funding requests (FM1 and FM4). A commitment of a further $200,000.00 to $400,000.00 in 1999 will be required to complete the Yards Properties Study.

Recommendation:

It is recommended that:

This report be received for information.

Council Reference/Background/History:

The Budget Committee, at it's July 7, 1998 meeting, "¼requested the Commissioner of Corporate Services to report to the Budget Committee on July 13, 1998 advising how many consultants have been hired to date to achieve the moves to City Hall, at what cost and why this work cannot be completed in-house."

A report submitted to the Budget Committee meeting of July 13, 1998 was deferred and further information with respect to the details of the Request for Proposal was requested of the Commissioner of Corporate Services.

Discussion:

The report of the Commissioner to the Budget Committee entitled Use of Consultants at City Hall dated July 12, 1998 outlines the rationale for consultants and the breakdown of anticipated costs contained within the transition funding requests.

Attached to this report as Appendix I are the relevant sections of the Draft Request For Proposal for Office and Civic Space Consolidation that outline the role of the consultants and the overall process for retention of the consultants. This document is currently being reviewed by other facilities and real estate staff, legal staff and purchasing staff.

Within the funding request is an allocation of $300,000.00 for Yards Properties Study to complete a plan for rationalization. Development of a Request for Proposal for this work will be completed by August 31, 1998. This project will require similar analysis as the Office and Civic Space project but will also require additional consulting expertise to analyse trip time and locational requirements for operational staff. The issues of optimum locations for fleet maintenance and deployment require careful analysis in order to propose the best consolidation program. In addition, real estate and environmental remediation analysis will be required to a greater extent due to the location and previous land use history of many yard locations. The funding request contained within this project will require a further commitment of funds in 1999 to complete the overall study. It is anticipated that the overall cost of consulting services for this program will be between $500,000.00 and $700,000.00 (including the $300,000.00 contained within this request). The estimate is based on the actual consulting costs of the Fire and Ambulance Consolidation Study approved by Council and currently underway.

Conclusions:

The use of consultants on these space consolidation projects is required to meet the project deadlines and provide external best practice and current market advice.

The relevant sections of the Draft Request for Proposal for Office and Civic Space Consolidation that outline the role of the consultant and overall process is attached as Appendix I of this report.

The Request for Proposal for the Yards Properties Study will be completed by the end of August 1998. The actual work of the study will proceed in September 1998 and continue on into 1999. The overall scope of consulting is anticipated to cost between $500,000.00 and $700,000.00.

Contact Name:

Mark DaviesTel: 397-0805 / Fax: 397-0825

e-mail:mark_davies@metrodesk.metrotor.on.ca

Project Team Lead, Facilities & Real Estate Division

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Appendix 1

Relevant Sections of Request for Proposals

1.0Overview:

1.1.Background:

1.1.1.The City of Toronto Act (1997) created a new City of Toronto from seven distinct municipal organizations effective January 1, 1998.

1.1.2.Each of the former municipal organizations had key office and civic buildings to provide public service and accommodate employees.

1.1.3.As the new organization amalgamates the organizational downsizing will reduce the need for office space to accommodate employees. In addition, the opportunity to revisit space standards and alternate work arrangements to serve the objectives of the new City is also anticipated to reduce the overall space requirements.

1.1.4.The projected reduction in employees currently housed in office and civic buildings is 700 people in 1998 and a further 700 people in 1999. The gross average rentable square feet per employee is approximately 300 sq. ft. (this information requires further refinement and verification through the course of this project).

1.2.Scope of the Project:

1.2.1.The following City-owned buildings and the properties upon which they are located are included in the scope of this project:

City Hall - 100 Queen Street W

Metro Hall - 55 John Street

Scarborough Civic Centre - 150 Borough Drive

North York Civic Centre - 5100 Yonge Street

Etobicoke Civic Centre - 399 The West Mall

York Civic Centre - 2700 Eglinton Avenue W.

East York Civic Centre - 850 Coxwell Avenue

Old City Hall, 60 Queen Street W.

590 Jarvis Avenue

703 Don Mills Road

277 Victoria Street

75-81 Elizabeth Street

951 Wilson Avenue W

5248 Yonge Street

1.2.2.The project will also include analysis of opportunities for staff consolidation into City owned buildings from high occupancy cost leased space

1.2.3.The project requires research and data collection activities to provide options for consolidation of space and necessary capital investments / projected return on investments.

1.2.4.The principles, objectives, scope and criteria for relocation are attached as Appendix ???. This information report will received by Council on July 29-31, 1998.

1.2.5.The project reporting structure and internal staff teams are attached as Appendix ???.

1.3.Overview of Deliverables:

1.3.1.The prime consultant will provide expertise to support the work of the project team and work-teams. The consultant's role will be to provide relevant industry information, facilitation of staff team processes and development of recommendations with respect to each project area in a consistent and well-communicated manner.

1.3.2.The prime consultant will assist City staff in defining space needs for service delivery and for staff accommodation by function. This will entail a collaborative approach as Departments in the new City are currently challenged with the task of amalgamation, downsizing and defining service delivery standards and methods.

1.3.3.A conceptual allocation of space for buildings is required by September 30, 1998. The report should summarize the status of service delivery requirements and space needs anticipated through the year 2000. The report must recommend, for each building, i) the options for retention or disposal ii) best use of space for service delivery and support service consolidation (including high level calculations to demonstrate fit) iii) the future ten year operating and capital cost projections for the building (including debt load) iv) analysis of operating considerations and office space suitability and v) the net appraised market value of the building and associated real estate market considerations. The report will require sample drawings of the civic centre and office buildings to illustrate conceptual allocations but not detailed block and stack plans that consider detailed adjacencies and detail space allocations.

1.3.4.The final deliverable of the project by November 2, 1998 will be detailed block and stack plans for service delivery and Departmental space allocations and a detailed two year implementation plan (1999-2000) for staff relocations and portfolio adjustments.

1.4. Work of Staff Teams and Role of the Consultant:

1.4.1.Senior Management Team (Department Commissioners and CAO) and City Council will review recommendations, provide further direction and approve the office and civic space consolidation program. The prime consultant will be required to make presentations of approximately 2 hours to the Senior Management Team and subsequently to City Council in October and then again in December. The presentations will correspond with the conceptual allocations report (see 2.3.3) and with the final detailed program report (see 2.3.4).

1.4.2.The Steering Committee is comprised of the Directors of Support Services & Integration and the Amalgamation Team Leaders for each Department. The prime consultant will be required to provide one two hour progress briefing and strategy session to this group in August, September, October and November.

1.4.3.The Project Team is comprised of the project team lead, facility planners and leaders of the work-teams. Representatives from the communications, information technology and human resources areas of the new City also participate on the project team. The prime consultant will meet weekly with the project team (1.5 hours) to review progress, co-ordinate information from sub-committees, review lease collapse opportunities, review real estate data and building condition data, provide industry analysis and develop strategic recommendations.

1.4.4.The Space Capture Team is a work-team actively engaged in capturing City buildings in AutoCAD R14 format. Their work is comprised of two key components: i) establishing base building drawings and ii) adding detailed layers and capturing drawings in the Computer Aided Facilities Management (CAFM) database (SPAN FM) for efficient move management from 1999 onward. This work-team will complete base building drawings, area calculations, conceptual allocation drawings and block/stack plans for the final report in co-ordination with the space planning consultant.

1.4.5.The Workspace Strategies Team is a work-team reviewing current space standards and alternative work arrangement opportunities in the new City. The team is comprised of facility planning staff, ergonomic specialist staff, information technology staff and human resource staff. The prime consultant will work with this group to further develop updated space standards, common office layouts and telecom/IT requirements, common area requirements, alternative work arrangements, functional requirements by position, furniture analysis, implementation plans and the business case for required investments. The prime consultant will incorporate the updated workspace strategies, analysis of impacts and an implementation schedule into the final report.

1.4.6.The Economic Models Team is a work-team that will review charge-back options that create appropriate space reduction incentives and are cost efficient from an administration perspective. This group will be established in August and will be comprised of accounting/budget/financial planning specialists and facilities management representatives. The prime consultant will be required to assist in providing space accounting and charge-back systems from comparable public and private organizations. The prime consultant will incorporate the preferred charge-back model, analysis of impacts and an implementation schedule into the final report.

1.4.7.The Data Capture Team is a small work-team who are compiling data from multiple sources to serve the information requirements of the project. The information anticipated to be compiled by the end of August is as follows (on a per building basis): operating costs, debt load, current staff numbers, current workstation and enclosed office numbers, current "Departmental" space allocations, leased space information, furniture inventory data, building condition surveys (where available) and capital expenditure forecasts (where available). The prime consultant will be provided with the information gathered by this work-team and additional City held information that will further improve the consolidation analysis will be sourced via this work-team. A key component of the work of the prime consultant will be to complete the necessary additional research and data collection required for the project (primarily building condition surveys, required capital investment estimates and real estate market/valuation data).

2.0Buildings Overview:

2.1. Building Statistics:

2.1.1.The following chart details base information about the buildings. Further refinement of this data is currently occurring and will be available to the successful proponent.

Building	Construction Date	S.F. *	No. of Occupants	Additional Details
City Hall		606,851	2000	Chosen as seat of government for new City of Toronto
75-81 Elizabeth Street		15,378	52
277 Victoria Street		109,729	600
Metro Hall		631,393	1750
590 Jarvis Street		58,000	395
703 Don Mills Road		130,000	300
Old City Hall		186,000	300	95% tenanted by the Attorney General for Provincial Courts.
North York Civic Centre		300,000	1000
5151 Yonge Street		3,500		100% leased to Korean Bank
5248 Yonge Street		2,840		Leased to Family Services
951 Wilson Avenue		72,000		15 of 18 condominium units owned by the City
Scarborough Civic Centre		154,477	648
160 Borough Drive		13,380	95	Connected to the Scarborough Civic Centre - owned by Ministry of Health
Etobicoke Civic Centre		134,400	450
York Civic Centre		60,956	200
East York Civic Centre		63,650	300

2.2. Information Available to the Consultant for Each Building

Building	Operating Costs	Debt Load	Building Condition Survey*	Furniture Review	Base Building CAD Dwgs
City Hall	YES	NONE	NO	YES	YES
75-81 Elizabeth Street	YES	NONE	NO	YES	YES
277 Victoria Street	YES	NONE	NO	YES	YES
Metro Hall	YES	YES	YES	YES	YES
590 Jarvis Street	YES	NONE	YES	YES	YES
703 Don Mills Road	YES	YES	YES	YES	YES
Old City Hall	YES	YES	YES	YES	YES
North York Civic Centre	YES	NONE	NO	YES	YES
5151 Yonge Street	YES	NONE	NO	YES	N/R
5248 Yonge Street	YES	NONE	NO	YES	September 98
951 Wilson Avenue	YES	NONE	NO	YES	October 98
Scarborough Civic Centre	YES	NONE	NO	YES	YES
160 Borough Drive	YES	NONE	NO	YES	YES
Etobicoke Civic Centre	YES	NONE	NO	YES	August 98
York Civic Centre	YES	NONE	NO	YES	YES
East York Civic Centre	YES	YES	NO	YES	YES

* Components of building condition survey's exist for all buildings but not in one document or source unless indicated. All City information will be provided to the Consultant's to reduce the need for duplicated study.

3.0Consultant Work Program Requirements:

3.1. Categories of Work Program

3.1.1.The following categories of work program will be required of the prime consultant i) Strategic Space Planning and Portfolio Analysis ii) Building Condition Analysis iii) Real Estate Analysis

3.1.2.The key areas of research, analysis and strategy required of the prime consultant are outlined in the relevant work program section

3.1.3.The research, analysis and strategy detailed in this section are in addition to any requirements and consultant roles outlined in Section 2.0.

3.2. Strategic Space Planning and Portfolio Analysis:

3.2.1.Review proposed space standards and alternative work arrangements program and provide expert recommendations about the application to i) individual building floor plates ii) gross aggregate space availability iii) common space requirements iv) potential exceptions and v) communications/strategy required to address change in management style and corporate culture

3.2.2.Consultation with Departments and Steering Committee to establish service delivery space requirements and review of design options for key service buildings to satisfy integrated service delivery.

3.2.3.Review of existing way-finding systems and main building signage for public areas of buildings within portfolio. Proposal of cost efficient retrofit of all main building signs to present consistent new logo for building signage. Recommend consistent way-finding system that can reuse as much existing signage as possible, be extended in the future throughout the facilities portfolio and recommends design elements/principles, in addition to signage, to improve way-finding in public buildings. Prepare signage specifications for key signage categories and a detailed tender package for upgrading of the buildings public area signage.

3.2.4.Review existing systems and case goods furniture and propose re-use programs, potential upgrade program and provide associated business case to support investments that meet the principles of the project. This activity will occur in conjunction with the work of the Workspace Strategies Team.

3.2.5.Integration of real estate data, base building data and organization data and provide recommendations about required buildings and potentially surplus buildings.

3.2.6.Develop a detailed move processes in conjunction with the project team that will allow City staff to meet the implementation schedule and provide excellent customer service in a cost efficient manner. The use of electronic move management using the SPAN system will form an integral part of the planning and move tracking/document processes.

3.3. Building Condition Analysis:

3.3.1.Review existing data on building condition and future years capital program where available (as outlined in Section 3.2).

3.3.2.Complete building condition analysis for buildings (where City data does not exist) to evaluate base building condition for office and civic space use and required capital investments (for all buildings). Identify key structural, HVAC, electrical, mechanical and architectural deficiencies and future remediation/replacement costs for a ten year projection.

3.3.3.Review current office infrastructure (IT cabling and equipment, telecom, environmental comfort and lighting), in consultation with the project team, and outline costs of any necessary upgrades to meet i) minimum legislated standards ii) Class B office space standards and iii) Class A office space standards.

3.4. Real Estate Analysis:

3.4.1.Provide a limited appraisal of highest and best use market value on a vacant possession basis as at December 31, 1998 for each of the buildings except City Hall and the five civic centre buildings. Provide analysis for possible zoning changes and impact on market value. Provide analysis of sale-leaseback options for one, two and five year leases of complete space back to the City including impact on market value and lease costs.

3.4.2.In conjunction with the City Real Estate staff, provide a detailed review of opportunities for lease of City owned space to third party tenants including applicable square foot lease rates based on the current market demand for office space in the area of each building.

3.4.3.Provide review of costs and availability of potential swing space to assist in implementation of consolidation - amount and location to be established in conjunction with the Project Team.

4.0Form of Proposal Submission:

4.1. Proposal Format Requirements:

4.1.1.Only the following information is to be submitted.

4.1.2.The proposal must be submitted in the order noted and no additional information will be considered.

4.1.3.The proposal and covering letter are limited to twenty (20) pages of 8 ½" x 11" letter size format paper with text font to be Helvetica or similar font with point size 10. Titles can be of any size font.

4.1.4.The proposal must be a cerlox bound document - if an opaque cover is utilized the name of the Prime Consultant, the date and the title "Proposal for Provision of Consulting Services for Office and Civic Space Consolidation in the City of Toronto" must be prominently displayed.

4.2. Section 1 - Identification:

4.2.1.The proponent must identify the Name, Address, Phone, Fax and Electronic Mail Address of the Prime Consultant and all other parties with a contractual relationship to the Prime Consultant in this Proposal Submission.

4.2.2.Identification of the legal registration of the Prime Consultant and any Subcontracted Consultants (sole proprietorship, corporation)

4.3. Section 2 - Project Understanding:

4.3.1.The Proposal must indicate that the proponent has an understanding of the scope of the project as outlined in this Request for Proposal.

4.3.2.The Proponent must indicate their understanding of the complex nature of the project and the sensitive issues associated with the project and their approach to organizing the project and position on the identified sensitive issues.

4.3.3.The Proposal must demonstrate an understanding of the environment under which the project is being undertaken and the potential influences on the project activity.

4.4. Section 3 - Consulting Team Organization:

4.4.1.Provide detailed description of the organization of the Consulting Team including relationships to the Prime Consultant.

4.4.2.Elaborate on how the organization of the Consulting Team will work with the organization of the City staff project teams to complete the project.

4.4.3.Confirm the Key Contacts for the Prime Consultant and for each discipline reporting to the Prime Consultant.

4.4.4.Elaborate on the roles and responsibilities of the Prime Consultant, the Key Contacts and any Support Team Members for the project.

4.4.5.The Prime Consultant and Key Contacts will be required for the duration of the project. Identify strategies and individuals that can fulfill the roles and responsibilities for any unforeseen events requiring replacement of team members.

4.4.6.In the event that the schedule was accelerated for certain activities, demonstrate the ability to supplement the team on short notice.

4.5. Section 4 - Project Experience:

4.5.1.Provide information about three recent and relevant projects of similar scope, size and complexity completed by the Consulting Team and elaborate on how experience from each of the projects can be applied to this project. In particular, note how innovative solutions were applied to meet the intent of the project objectives in each case.

4.5.2.Provide detailed information about the relevant previous experience of all Key Contacts for the Prime Consultant and Subcontracted Consultants that qualifies the individual to undertake the roles and responsibilities assigned to them in Section 3 of the Proposal.

4.5.3.Provide information outlining the length of relationship(s) of the Prime Consultant to the Subcontracted Consultants in the case of a consortium proposal or

4.5.4.the history of the Prime Consultant in providing full service space planning, building science and real estate portfolio analysis in the case of a single consultant proposal.

4.5.5.Provide a reference contact list (discipline, consulting firm, client company, contact, phone, fax) of the fifteen most recent clients for which members of the Consulting Team have completed projects.

4.6. Section 5 - Project Schedule:

4.6.1.The proposal must include a comprehensive schedule in graphic chart form outlining the necessary work activities and project milestones.

4.6.2.The proposal must outline specific methods and processes to control schedule and provide solutions with examples of methods used on past projects to correct any schedule deviations.

5.7Section 6 - Professional Upset Fees:

4.6.3.The proposal must clearly indicate the Total Upset Fee and it's breakdown under the following scopes of work i) strategic space planning and portfolio advice ii) real estate analysis and iii) building condition analysis.

4.6.4.The Professional Fees are all inclusive and will be invoiced monthly during the project based on services rendered. It includes all time to provide services indicated in the Request for Proposal including overtime and premium time required to complete the project.

4.6.5.Disbursements such as travel, communication, reproduction and shipping costs are excluded from this Proposal. No administration fee will be considered.

4.6.6.Professional Fees submission to exclude GST.

4.6.7.No escalation clause will be accepted.

4.6.8.In order to evaluate services rendered and to assess requirements for additional services, the Proposal must include hourly rates for the Prime Consultant, Key Contacts and other Consulting Team members.

5.0Proposal Evaluation and Selection:

5.1.Purpose

5.1.1.The purpose of the evaluation process is to enable the City to select the best combination of service, expertise, support and cost to meet its stated requirements.

5.2.RFP Evaluation Process & Criteria:

5.2.1.Each Proposal will be evaluated fully and analyzed for each of the following categories, established prior to the release of this RFP, which are not listed in any particular order:

(1)The Consulting Team understanding of the project.

(2)The Consulting Team Organization.

(3)The Consulting Team's experience with projects of similar scope and size.

(4)The experience and qualifications of the individuals assigned to the Consulting Team relative to the Project requirements.

(5)References for the companies and individuals that comprise the Consulting Team.

(6)Project schedule and control of schedule.

(7)Professional fees.

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(Report dated (July 12, 1998) addressed to the Budget Committee,

from the Commissioner of Corporate Services)

Purpose:

To provide the Budget Committee with information about the use of consultants in the City Hall relocations.

Funding Sources, Financial Implications and Impact Statement:

Funding in the amount of $1.7 million for this Stage One planning and critical 1998 moves has been requested from the Transition Reserve Fund - this request is currently under consideration by the Budget Committee. A further funding amount of $1 million from the Transition Reserve Fund to complete this work and initiate the Yards property consolidation study is also under consideration by the Budget Committee. An allocation of $710,000.00 for consulting fees is included within both of these funding requests and is outlined in the discussion section.

Recommendation:

It is recommended that this report be received for information.

Council Reference/Background/History:

The Budget Committee, at it's July 7, 1998 meeting, "¼requested the Commissioner of Corporate Services to report to the Budget Committee on July 13, 1998 advising how many consultants have been hired to date to achieve the moves to City Hall, at what cost and why this work cannot be completed in-house."

Discussion:

The Departments are now re-organizing and are requiring adjustments to space allocations. The Facilities & Real Estate Division must respond to manage relocations and overall space planning to ensure the new organization can be as effective as possible.

Consultants have not been utilized in the management or planning of any Council and/or staff relocations that have occurred in 1998. Consultants will not be utilized in any relocation management and/or planning to occur in the remainder of 1998. This work has been and will continue to be completed by City staff as the significantly condensed time-frames for the relocations to date and projected in 1998 require detailed knowledge of existing buildings and a "just-in-time" approach to planning.

The consulting firm of Kelly, McTernan & Lavoie was retained by the Facilities & Real Estate Division in April to assist in the strategic planning necessary to establish the workplan for the office and civic space consolidation project. This work was funded by a .$10,000.00 Department Purchase Order. Findings of a summary report submitted to the City are included in a staff report submitted to the July 20, 1998, Corporate Services Committee and conclude the scope of current work by this firm. City staff were extensively involved in the planning process but required facilitation of planning sessions and external advice on current market trends.

As noted above there is a further request for $2.7 million to complete the planning for office and civic space consolidation, initiation of the Parks/Works Yards study and the necessary 1998 relocations. The Budget Committee has requested a breakdown of consulting fees contained within these two requests. The breakdown of consulting fees in the total amount of $710,000.00 is as follows:

(1)$100,000.00 will be expensed to hire students and purchase additional hardware/software to complete the necessary Computer Assisted Drawings of the civic and office space buildings. There are insufficient staff resources to complete the drawings quickly and the students are less costly. This activity will allow City staff to expedite relocation planning and will reduce actual relocation expenses in 1999 and 2000 by up to 30 percent.

(2)$310,000.00 will be utilized to retain a prime consultant to provide expert advice and complete the necessary work to detail recommendations, associated budget savings and an implementation plan for office and civic space consolidation. To this end a Request for Proposals for a prime consultant or consortium will be issued in July 1998.

(3)$300,000.00 will be utilized to initiate the planning required for the Yards consolidation. Staff have already completed an initial inventory of Yard properties in preparation for this project.

The use of consultants on these projects will be to provide the expert analysis and recommendations covering all aspects of portfolio management from reasonable space standards to building condition surveys to real estate market analysis. In addition, consultants will also be utilized to ensure that best practices in the use of space and the overall reduction of space are achieved for the new City of Toronto. City staff will be extensively involved in this project in providing space needs analysis and base building information. The current and anticipated workload through 1998 to complete critical relocations does not allow City staff to complete the planning phases of these projects by the December deadline.

Conclusions:

The City has not retained any consultants to complete relocations in 1998. City staff will perform all functions related to the planning and management of the anticipated moves into City Hall in 1998. Consultants have been retained to date to assist with the overall approach to the office and civic space consolidation project and involvement from a prime consultant is required to complete Stage One of this project in 1998. Consultants will also be required to assist with the planning required to consolidate the City Yards properties.

The use of consultants on these space consolidation projects is required to meet the project deadlines and provide external best practice and current market advice.

Contact Name:

Mark DaviesTel: 397-0805 / Fax: 397-0825;

e-mail: Project Team Lead, Facilities & Real Estate Division.

5

Scarborough Port Union Pedestrian Underpass

- Transportation Capital Budget Project No. C-TR-703

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that:

(1)the amount of $900,000.00 for the Scarborough Port Union Pedestrian Underpass: Transportation Capital Budget Project No. C-TR-703 be included in the 1999 Corporate Budget and that the debenture authority be retained for this project; and

(2)the projects referred to in the report (July 9, 1998) from the General Manager, Transportation Services, headed, "Additional Asphalt/Concrete Repairs", be considered as part of the 1999 to 2000 Capital Budget process.

Background:

The Budget Committee on July 28, 1998, had before it the following:

(1)transmittal letter (July 14, 1998) from the City Clerk forwarding a report (July 9, 1998) from the General Manager, Transportation Services; and

(2)report (July 15, 1998) from the General Manager, Transportation Services.

Councillor Frank Faubert addressed the Committee in connection with this matter.

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(Transmittal Letter dated July 14, 1998, addressed to the Budget Committee,

from the Urban Environment and Development Committee)

The Urban Environment and Development Committee on July 13, 1998, directed that the attached report (July 9, 1998) from the General Manager, Transportation Services, regarding the Scarborough Port Union Pedestrian Underpass, be forwarded to the Budget Committee for consideration.

The Urban Environment and Development Committee reports, for the information of the Budget Committee, having requested the General Manager, Transportation Services, to submit a report to the next meeting of the Budget Committee regarding the proposed reallocation of $900,000.00 from Project No. C-TR-703, Scarborough Port Union Pedestrian Underpass, to Project No.C-TR-701, Scarborough Sidewalk Construction; specifically, whether such proposed reallocation is an appropriate use of funds given the transportation requirements City-wide.

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(Report dated July 9, 1998, addressed to the Urban Environment and Development Committee

from the General Manager, Transportation Services.)

Purpose:

This report is to re-allocate $900,000.00 in 1998 from Project No. C-TR-703, Scarborough Port Union Pedestrian Underpass, to Project No. C-TR-701, Scarborough Sidewalk Construction.

Recommendation:

It is recommended that $900,000.00 be re-allocated from Project No. C-TR-703, Scarborough PortUnion Pedestrian Underpass, to Project No. C-TR-701, Scarborough Sidewalk Construction; and further that this report be forwarded to Scarborough Community Council for its information.

Council Reference/Background/History:

The proposed Port Union Pedestrian Underpass is one component of the Port Union Common/Waterfront Regeneration Project which stretches from the Highland Creek to the RougeRiver. The project includes the creation of a waterfront trail, regeneration of native vegetation, creation of a wetland and provision of other features to integrate the former City of Scarborough's Village Common with the Waterfront Trail. The Port Union Pedestrian Underpass links the Port Union Road Headland to the Village Common by creating a tunnel underneath the railway line separating them. Planning for the area has been ongoing for several years and Environmental Assessment approval is expected this summer.

Comments and/or Discussion and/or Justification:

It was originally expected that construction of the underpass could begin in 1998, but with the time it has taken to obtain approvals and property it appears that it will only be possible to prepare the engineering design and construction documents for the underpass before the end of the year. It is anticipated that the construction contract will be tendered in early 1999. In the Capital Works Program, Project No. C-TR-703, Scarborough Port Union Pedestrian Underpass, has $1,000,000.00 allocated for 1998. Accordingly, because of the delay in construction to 1999, it is appropriate to re-allocate $900,000.00 from this project account, leaving $100,000.00 for the engineering design work. A revised project schedule will be provided in the 1999-2003 Capital Works Program.

It is proposed to re-allocate the $900,000.00 in 1998 to the concrete breakout/repair and overlay program in Project No. C-TR-701, Scarborough Sidewalk Construction, in the former City of Scarborough, as this program was cut back as part of the original budgeting process. The re-allocation of these funds will allow some deferred locations to be completed in 1998. They are as follows:

Additional Asphalt/Concrete Repairs

Street Name Costs

(1)Westbourne Avenue

Donside to St. Bede's Road$ 50,000.00

(2)Manhattan Drive

Honey Drive to Warden Avenue$ 92,000.00

(3)Murray Glen Drive$ 52,000.00

(4)Surrey Avenue

Victoria Park Avenue to Pharmacy Avenue$153,000.00

(5)Falmouth Avenue

Eglinton Avenue to Danforth Road$200,000.00

(6)Holmstead Road$ 43,000.00

(7)Old Finch Road

Pickering Town Line to Beare Road$ 85,000.00

(8)Miscellaneous Asphalt Concrete Repairs

-upgrades to bus landing pads

-homeowners' complaints, etc.$225,000.00

$900,000.00

Conclusions:

Work on the Port Union Pedestrian Tunnel has proceeded to the point where only $100,000.00 in engineering work can be done in 1998. The remaining $900,000.00 should be re-allocated to Project No. C-TR-701, Scarborough Sidewalk Construction.

Contact Name:

Mr. Gary H. Welsh, Director, Road and Traffic Services, Works and Emergency Services,

396-7842, Fax: 396-5681, E-mail: welsh@city.scarborough.on.ca.

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(Report dated July 15, 1998, addressed to the Budget Committee,

from the General Manager, Transportation Services)

Purpose:

This report responds to the request from the Urban Environment and Development Committee to provide information on the proposed reallocation of funds from this project in relation to transportation needs on a City-wide basis.

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendation:

It is recommended that this report be received for information.

Council Reference/Background/History:

At the July 13, 1998, Urban Environment and Development Committee meeting, the Committee considered a report from the General Manager, Transportation Services, dated July 9, 1998, requesting that $900,000.00 from the Scarborough Port Union Pedestrian Underpass, Project No.C-TR-703 be reallocated to Project No. C-TR-701, Scarborough Sidewalk Construction as a result of projected under expenditures in the Underpass project in 1998. The Committee directed that the report be forwarded to the Budget Committee for consideration and requested that a further report be submitted to the Budget Committee on whether the recommended reallocation of funds to the Sidewalk Construction project is an appropriate use of funds given the City-wide transportation capital funding needs.

Comments and/or Discussion and/or Justification:

Project No. C-TR-703, the Scarborough Port Union Pedestrian Underpass, was included in the capital budget submission of the former City of Scarborough that was amalgamated with the six other capital budget submissions from the other former municipalities to develop the consolidated 1998-2002 Capital Works Program for Transportation. The capital budget was approved by City Council with an allocation to the Underpass project of $1,000,000.00 for 1998. Other projects in the Scarborough District were deferred from 1998 to 1999 to accommodate the funding needs of this project.

The July 9, 1998, report to the Urban Environment and Development Committee outlines the reasons why the anticipated expenditures in 1998 for this project will only be $100,000.00 and requests that the funds freed up by the under-expenditure in 1998 be reallocated to additional asphalt and concrete repairs in the Scarborough District. These repairs were previously identified by staff of the former City of Scarborough as required in 1998, but were deferred during the initial budget process at the City of Scarborough because of capital funding limitations.

Overall, the capital funding needs for transportation infrastructure in the City of Toronto exceeds the funding provided by City Council by approximately $45 million per year. Therefore, any under-expenditure in transportation capital projects should be reallocated to other transportation capital needs. Recognizing that other projects in the Scarborough District were deferred to accommodate the anticipated expenditure in the Underpass project in 1998, it is appropriate that any funds freed up by an under-expenditure be first reallocated to other needs in the Scarborough District. If the funds could not be utilized in 1998 in the Scarborough District, then it would be appropriate to consider other projects based on City-wide funding needs.

Conclusions:

The reallocation of funds from Project No. C-TR-703, the Scarborough Port Union Pedestrian Underpass to Project No. C-TR-701, Scarborough Sidewalk Construction is appropriate in relation to the City-wide funding needs for transportation infrastructure because projects in the Scarborough District were deferred from 1998 to accommodate the Underpass project during the original budget deliberations at the former City of Scarborough.

Contact Name:

T.W. Mulligan

Assistant Director,

Planning, Design & Programming

Phone - 392-8329

6

Award of Contract for a Small Scale Mixed Waste

Recycling and Organics Processing Facility

(City Council on July 29, 30and 31, 1998, amended this Clause:

(1)by striking out Recommendation No. (4) of the Budget Committee and referring it back to the Budget Committee for reallocation of the amount of $3.2 million; and the Chief Financial Officer and Treasurer was requested to submit to the Budget Committee, a complete updated list of the status of previously approved (1997) and prior projects that have been started; and all Department Heads were requested to submit to the Budget Committee a list of those projects which they wish to go forward with and the availability of funding therefor; and

(2)to provide that the appropriate City officials be authorized to execute the contract.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (July 6, 1998) from the General Manager of Solid Waste Services wherein it is recommended that:

(1)staff be authorized to enter into a contract with a joint venture of Stone and Webster Canada Limited and Canada Composting Inc. (a company designated by Stone and Webster Canada Limited) for:

(a)the design and construction of a Small Scale Mixed Waste Material Recycling and Organics Processing Facility at the Dufferin Transfer Station, at a total cost of $10.4 million after the municipal GST rebate, and

(b)the operation of the facility and the marketing of the output material for a one-year term with options for two one-year extensions in accordance with the operating fee schedule contained in this report,

such contract to be in accordance with the Request for Proposals and the Proposal submitted, modified as set out in this report, and on terms and conditions satisfactory to the Commissioner of Works and Emergency Services, including such financial and performance guarantees to be provided by Stone and Webster Canada Limited as deemed appropriate by the Commissioner, and in a form satisfactory to the City Solicitor;

(2) a contingency amount of $500,000.00 be provided for any approved additional work in relation to Recommendation No. (1)(a);

(3)subject to finalization of an agreement as set out in Recommendation No. (1), MacViro Consultants Inc. be engaged as project consultants to review the design of the facility, inspect site construction and monitor contractor progress and performance at a cost not to exceed $238,000.00 after the municipal GST rebate; and

(4)financing in the amount of $3.2 million be transferred from Project C-SW360 - Recycling to Project C-SW004 - Recycling Facilities to accommodate the shortfall in financing resulting from the Request for Proposals process.

Background:

The Budget Committee on July 28, 1998, had before it a transmittal letter (July 15, 1998) from the City Clerk forwarding a report (July 6, 1998) from the General Manager - Solid Waste Management Services, regarding the Award of Contract for a Small Scale Mixed Waste Recycling and Organics Processing Facility.

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(Transmittal Letter dated July 15, 1998, addressed to the Budget Committee,

from the Works and Utilities Committee)

Recommendation:

The Works and Utilities Committee on July 15, 1998, recommended to the Budget Committee the adoption of the report dated July 6, 1998, from the General Manager of Solid Waste Management Services, respecting the award of a contract for a Small Scale Mixed Waste Recycling and Organics Processing Facility.

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(Report dated July 6, 1998, addressed to the Works and Utilities Committee

from the General Manager of Solid Waste Management Services)

Purpose:

The purpose of this report is to present the results of the Request for Proposals for a Mixed Waste Recycling and Organics Processing Facility, and provide the rationale for awarding the contract for design, construction and operation of the facility to a joint venture of Stone and Webster Canada Limited and Canada Composting Inc. This facility is required to support the City's target of 50percent waste diversion by 2006.

Funding Sources, Financial Implications and Impact Statement:

The proposed Small Scale Mixed Waste Recycling and Organics Processing Facility has a total capital cost of $11.2 million after municipal GST rebate, including consulting fees and contingencies.

Financing of $8 million for the facility has been provided for through the approved 1998 Capital Works Program under Project C-SW004 - Recycling Facilities, of which $927,000.00 is for 1998 requirements. This amount was projected to be the cost of the facility based on initial planning estimates. It is recommended that financing in the amount of $3.2 million be transferred from Project C-SW360 - Recycling to accommodate the shortfall in financing for this project.

The small scale facility is projected to be operational in the second quarter of 2000, so there are no operating budget implications for 1998. The first year operating costs of $915,400.00 for the small scale facility will be offset by estimated disposal cost savings and tipping fee revenue of $412,000.00, for a net operating cost impact of $503,400.00 ($25.00 per tonne processed). This additional expenditure is recommended in view of the essential 3Rs systems planning information that will be provided by the small scale facility.

The projected amortized capital and operating costs for the full scale facility are $6.8 million for 100,000 tonnes of mixed waste per year or $7.1 million for 165,000 tonnes of organic material per year. The $6.8 million cost for processing mixed waste would be more than offset by projected disposal cost savings, tipping fee revenue, electricity sales revenue and material sales revenue, the total of which is estimated at $7.1 million per year, for an estimated net benefit of $350,000.00 per year. Processing source separated organic material generates a net financial benefit up to $3.7million per year, depending on the net additional costs associated with collecting source separated organic materials.

Recommendations:

It is recommended that:

(1)staff be authorized to enter into a contract with a joint venture of Stone and Webster Canada Limited and Canada Composting Inc. (a company designated by Stone and Webster Canada Limited) for:

(a)the design and construction of a Small Scale Mixed Waste Material Recycling and Organics Processing Facility at the Dufferin Transfer Station, at a total cost of $10.4 million after the municipal GST rebate, and

(b)the operation of the facility and the marketing of the output material for a one-year term with options for two one-year extensions in accordance with the operating fee schedule contained in this report,

such contract to be in accordance with the Request for Proposals and the Proposal submitted, modified as set out in this report, and on terms and conditions satisfactory to the Commissioner of Works and Emergency Services, including such financial and performance guarantees to be provided by Stone and Webster Canada Limited as deemed appropriate by the Commissioner, and in a form satisfactory to the City Solicitor;

(2) a contingency amount of $500,000.00 be provided for any approved additional work in relation to Recommendation No. (1)(a);

(3)subject to finalization of an agreement as set out in Recommendation No. (1), MacViro Consultants Inc. be engaged as project consultants to review the design of the facility, inspect site construction and monitor contractor progress and performance at a cost not to exceed $238,000.00 after the municipal GST rebate; and

(4)financing in the amount of $3.2 million be transferred from Project C-SW360 - Recycling to Project C-SW004 - Recycling Facilities to accommodate the shortfall in financing resulting from the Request for Proposals process.

Council Reference/Background/History:

At its meeting on April 28, 1998, City of Toronto Council adopted Clause No. 4 of Report No. 3A of The Works and Utilities Committee, which recommended that:

"Staff be authorized to open the price proposals and complete the evaluation process for the short-listed respondents to the Request for Proposals for a Mixed Waste Recycling and Organics Processing Facility, and report back to Committee with recommendations."

Council amended Clause No. 4 by adding thereto the following:

"It is further recommended that the Commissioner of Works and Emergency Services be directed to ensure that consultation takes place with the surrounding industrial and residential community and that a plan be developed for integrating the proposed facility into the industrial community in a way that makes the industrial community an integral part of the process."

Background information on the Request for Proposals process previously reported to City Council is contained in Attachment 1.

Discussion and Justification:

The Small Scale Mixed Waste Recycling and Organics Processing Facility is a key element of the City's waste diversion planning process, because it will be used to determine the role that mixed waste processing and source-separated organics processing facilities will play in achieving higher levels of waste diversion.

The small scale facility will divert up to 22,000 tonnes of waste per year and will provide essential 3Rs system planning information. The full scale facility will be capable of diverting up to 150,000tonnes of waste, or 15 percent of the total municipal waste stream.

Outcome of Evaluation Process:

Following a detailed analysis of the capital and operating costs contained in the price proposals, the submission from Stone and Webster Canada Limited, in association with Canada Composting Inc. (SWCL/CCI), was identified as the overall low cost proposal. Their submission provided the lowest capital cost and the lowest operating cost.

SWCL/CCI received a high rating in the evaluation of their technical submission. On the basis of this rating, coupled with the lowest proposed cost, it was determined that the SWCL/CCI proposal provided the best overall value to the City.

The key feature of the proposed facility is the patented BTA-Process, a proven German technology that combines sophisticated waste pre-treatment and separation techniques, along with advanced methods of anaerobic digestion within a fully enclosed, odour controlled facility. The facility captures recyclable container material and converts organic material into high quality compost and biogas. The biogas is then used to produce electrical and thermal power for the facility and other users.

The facility has a capacity of 15,000 tonnes per year when processing mixed waste or 25,000 tonnes per year when processing source-separated organic material. SWCL/CCI is guaranteeing a 70percent diversion rate for mixed waste delivered to the facility and a 90 percent diversion rate for organic waste. An overview of the proposed facility and its advantages are provided in Attachment2.

Capital and Operating Costs for the Facility:

The capital cost for the SWCL/CCI facility is $10.4 million after municipal GST rebate. A contingency cost of $500,000.00 for any approved additional work, and a consulting services cost of $238,000.00 have also been budgeted for a total project capital cost of $11.2 million.

The operating contract is for a minimum of one year with two one-year extensions, commencing in approximately May 2000. Under the terms of the operating contract, SWCL/CCI will be responsible for marketing all output material and will retain any revenue generated. A complete discussion of capital and operating costs, including an operating fee schedule, is contained in Attachment 3.

The first year operating fees are projected to be $915,400.00, based on processing mixed waste for six months and source-separated organics for six months. This cost will be partially offset by estimated disposal cost savings of $150,000.00 and estimated net tipping fee revenue of $262,000.00 from private sector material delivered to the facility, for a net annual operating cost impact of $503,400.00. Any additional cost for a residential source-separated organics (SSO) collection pilot project during the SSO phase of operation could be avoided by processing municipally collected organics-rich commercial waste from the downtown core, or by co-collecting mixed waste and SSO on the same truck.

After operating the small scale facility for a one-year period, a decision can be made on expansion to a full scale facility processing either 100,000 tonnes per year of mixed waste or 165,000 tonnes per year of SSO. Based on an assessment of all projected capital and operating costs, disposal cost savings, tipping fee revenue, energy revenue, and compost and recyclables revenue, it is estimated that the full scale facility could provide a financial benefit to the City of between $300,000.00 and $3.7 million per year. The complete financial analysis for the small scale and full scale facility is provided in Attachment 4.

It is proposed that the RFP consultants, MacViro Consultants Inc., be retained at a cost not to exceed $238,000.00, after municipal GST rebate, including contingencies, to provide contract administration and construction supervision services.

Management of Risk:

As with any waste management facility, there are financial risks and operational risks associated with this facility. The strategy of developing a small scale facility, which can be expanded later, was chosen to manage financial risks by allowing the City to evaluate different processing approaches at a small scale before committing to constructing full scale capacity. After the evaluation stage, the City can choose to expand to a full scale mixed waste processing facility or a full scale organics processing facility, based on an assessment of financial and operational viability. In the event that Toronto decided not to expand capacity, the facility can continue to be operated at the small scale capacity for either mixed waste or source-separated organics at no additional capital cost.

With respect to financial risk associated with marketing of material, SWCL/CCI has assumed the risk by being responsible for marketing all output material, and by providing a processing fee that is net of any material revenue they receive.

A strategy has also been developed to minimize operational risks by:

(1)choosing a proven technology with a demonstrated track record;

(2)requiring that the facility be fully enclosed with all exhaust air processed through a bio-filter;

(3)allowing no outside storage of compost material;

(4)using the Dufferin Transfer Station site which, in the unlikely event of an operational problem, will allow received material to be immediately re-directed to the waste transfer station; and

(5)requiring Stone and Webster Canada Limited to provide a $250,000.00 letter of credit to secure their obligation to ensure the proper operation of the facility.

SWCL and CCI will be forming a joint venture company for the purpose of executing the project. However, Stone and Webster, one of the largest and oldest engineering companies in Canada, will continue to have complete responsibility for the financial and performance obligations pertaining to the project.

Project Schedule:

The project schedule for the small scale facility, based on the SWCL/CCI submission, is as follows:

Negotiation of contract	July - August 1998
Detailed design	September - November 1998
Permits and approvals	September - December 1998
Equipment procurement and construction	November 1998 - January 2000
Start-up and initial operation	February - March 2000
Acceptance testing/substantial performance	April 2000
Commencement of operations phase	May 2000
Decision on expansion	May 2001

Public Consultation Strategy:

Two public meetings were held on June 16, 1998, to update the local community about this project and to gain knowledge of how this new facility might develop complementary relationships with the local business community. These public meetings were scheduled in the afternoon and evening at the Toronto Ambulance Headquarters near the Dufferin Transfer Station so that both local businesses and residents could attend. The meetings were advertised in the North York Mirror and in flyers distributed to all residents and businesses in the area bounded by Finch, Shepherd, Wilmington and Keele.

Although staff also telephoned local organics producers, there were no attendees from local industry at the afternoon session. Two local residents and one business owner attended the evening session. A staff person and a consultant presented the project in detail and addressed questions pertaining to the project.

Over the next several months, staff plan to meet with local businesses that generate organic waste to discuss potential linkages with this project. One possibility is to work with the businesses' waste haulers to arrange for delivery of waste material to the facility. Another future possibility is the sale of plant generated electricity to local businesses.

Further public consultation will include:

(1)follow up activities to build complementary relationships with the local business community;

(2)newsletters (with feed-back questionnaires) for site neighbours on a regular basis;

(3)a 24-hour telephone message line to receive any concerns during the construction phase of the facility; and

(4)establishment of an odour monitoring committee with public participation, if requested by site neighbours.

Conclusions:

The Small Scale Mixed Waste Recycling and Organics Processing Facility proposed by SWCL/CCI provides a cost effective opportunity to test the viability of processing both mixed waste and source-separated organic material to produce compost, biogas and recyclable material in an environmentally sound manner. It is therefore recommended that the City of Toronto proceed with construction of the facility.

Contact Name:

Andrew Pollock, Senior Manager - Waste Diversion and Planning

Solid Waste Management Division, Metro Hall

Phone: (416) 392-4715; Fax: (416) 392-4754

E-mail: Andy_Pollock@metrodesk.metrotor.on.ca.

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Attachment 1

Background Information on Request for Proposals Process

History:

At its meeting on April 9, 1997, the former Metropolitan Toronto Council adopted, with amendments, Clause No. 1 of Report No. 4 of The Environment and Public Space Committee, which recommended, in part, that:"The Commissioner of Works be authorized to issue a Request for Proposals for the design, construction and operation of a 20,000 tonne per year composting and mixed waste processing facility capable of processing both source-separated organic waste and mixed waste".

In September 1997, a Request for Proposals (RFP) was issued for the design, construction and operation of a 20,000 tonne per year Mixed Waste Recycling and Organic Processing Facility at the Dufferin Transfer Station located in the former City of North York. The proposal call was a two envelope process in which the price information was opened only if a respondent's technical proposal was short-listed, based on pre-determined evaluation criteria.

The RFP closed on January 8, 1998, and a total of seven proposals were received. MacViro Consultants Inc. (the consultants who prepared the RFP document) and Solid Waste Management (SWM) staff conducted an evaluation of the Technical Proposals to develop a short list, which was reviewed by an RFP Evaluation Committee consisting of staff from SWM, Finance and Legal Departments.

At its meeting on April 28, 1998, City of Toronto Council adopted Clause No. 4 of Report No. 3A of The Works and Utilities Committee, which recommended that:

"Staff be authorized to open the price proposals and complete the evaluation process for the short-listed respondents to the Request for Proposals for a Mixed Waste Recycling and Organics Processing Facility, and report back to Committee with recommendations".

Council amended Clause No. 4 by adding thereto the following:

"It is further recommended that the Commissioner of Works and Emergency Services be directed to ensure that consultation takes place with the surrounding industrial and residential community and that a plan be developed for integrating the proposed facility into the industrial community in a way that makes the industrial community an integral part of the process."

RFP Evaluation Process:

Seven proposals were received in response to the RFP for a Mixed Waste Recycling and Organics Processing Facility from the following respondents:

(1)AGRA Monenco Inc., in association with Wright Environmental and Machinex Inc.;

(2)B.W.S. Composting, a joint venture of M. Sullivan and Son and Bennett and Wright Group Inc.;

(3)Groupe Conporec Inc. and Kamyr Enterprises Inc.;

(4)Miller Waste Systems;

(5)Organic Waste Conversion;

(6)Recycling and Composting Alliance, a joint venture of Stinnes Enerco, The State Group, and RRT Design and Construction; and

(7)Stone and Webster Canada Limited, in association with Canada Composting Inc.

The proposal screening and evaluation process undertaken by MacViro and Solid Waste Management staff, and reviewed by the RFP Evaluation Committee, involved the following four steps:

Step 1:Initial screening of the technical proposals to ensure compliance with the minimum requirements set out in the RFP.

Step 2:Detailed technical evaluation of the remaining submissions.

Step 3:Requests for supplemental technical information and cost information from selected respondents to obtain comparable information required for decision making. At the completion of this step, proposals undergoing further consideration will form the short list.

Step 4:Opening of Price Proposals from the short-listed respondents and determination of the proposal that provides the best overall value to the City of Toronto.

After the completion of the technical evaluation, proposals from the following respondents were short-listed and the price proposals opened:

(1)AGRA Monenco Inc., in association with Wright Environmental and Machinex Inc. (AGRA);

(2)Miller Waste Systems (Miller);

(3)Recycling and Composting Alliance, a joint venture of Stinnes Enerco, The State Group, and RRT Design and Construction (The Alliance); and

(4)Stone and Webster Canada Limited, in association with Canada Composting Inc. (SWCL/CCI).

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Attachment 2

Overview and Advantages of SWCL/CCI Facility

Process Overview:

Waste entering the proposed facility will be discharged onto the tipping floor of the existing 700 Building at the Dufferin Transfer Station site and conveyed to a pre-sort station where oversized and unprocessable materials will be removed. The material continues through a trommel screen with two screen sizes to separate fine (mostly organic) materials, medium sized (mostly container) material, and large assorted materials such as newspaper, cardboard, film plastic and textiles. The medium and large material streams are manually and/or mechanically processed to sort out recyclable materials and residues. The remaining materials are organic rich and ready for the digestion process.

This organic rich waste is fed to the BTA-Process where a hydropulper eliminates the remaining inorganic contamination from the waste and defibres the organic elements, creating an organic pulp. The pulp is fed to a hydrocyclone where sand and grit is removed before the pulp is pumped to an anaerobic digester for decomposition into high quality compost and biogas.

The compost that meets the Provincial requirements for unrestricted use will be delivered to The Nu-Gro Corporation in Woodstock, Ontario, for final curing, bagging, and distribution to retail horticultural outlets. Compost material that does not meet the Provincial requirements will be applied to beneficial land uses.

The biogas will be fed to a small on-site cogeneration plant (a turnkey installation and operation from Tormont Energy Ltd.) that will use the gas to produce electricity and heat. The entire plant will be energy self-sufficient with excess energy being available for use on site or for possible sale. The intent is to utilize all of the biogas generated for electrical and thermal power generation. A gas storage tank will be provided on site, which will enable the facility to store gas during scheduled or unscheduled interruptions in the availability of the co-generation system. A flare will be installed for emergency backup, although it is unlikely that it will be used.

The receiving, processing, pre-treatment and digestion areas are all fully enclosed and all exhaust air will be processed through a biofilter to remove odour causing contaminants before discharge to the atmosphere.

Advantages of the SWCL/CCI Facility:

The SWCL/CCI proposal incorporates many features which make it well suited for the facility:

(1)The anaerobic digestion of solid waste to produce compost and methane followed by the utilization of the methane to cogenerate both electricity and heat provides the lowest green house emissions of any mixed waste management process (Environment Canada Report, 1995).

(2)The proposed single step anaerobic digestion process produces compost material after 15days of digestion. This compost material requires significantly less curing time than aerobic composting to produce a stabilized end product.

(3)The BTA process effectively removes contaminants, such as plastics, broken glass and grit, from the organic fraction. This enhances the probability of producing marketable compost materials, particularly from a mixed waste stream.

(4)The facility can be expanded to process 100,000 tonnes per year of mixed waste or 165,000tonnes of organic material by converting to a two-step digestion version of the technology with a shorter retention time for digestion. This would enable Toronto to increase the processing capacity by five times with a minimal increase in the footprint of the small scale facility.

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Attachment 3

Capital and Operating Costs for SWCL/CCI Facility

Once SWCL/CCI was identified as the preferred respondent, staff entered into negotiations with them to identify opportunities to reduce the gap between the proposed capital cost of their facility ($11.0 million before taxes) and the capital budget of $8.0 million identified in the 1998-2002 Capital Works Program, without compromising the performance of the facility.

These negotiations resulted in $1.5 million in capital cost savings, based on modifications to the requirements for the facility. The RFP required that the facility be capable of processing 15,000tonnes per year of mixed waste and 5,000 tonnes of source-separated organic waste concurrently. By adjusting this requirement to allow processing the two waste streams sequentially (one stream for a period of several months, followed by the other stream), SWCL/CCI was able to eliminate one of the two digester units, thus giving them the capacity to process either 15,000 tonnes of mixed waste or 25,000 tonnes of source separated organics per year. In addition, by reducing the material storage requirements and locating the administrative area in temporary facilities, SWCL/CCI was able to make more cost effective use of the existing composting building at the Dufferin Transfer Station site.

The revised capital cost for the SWCL/CCI facility is $10.4 million after municipal GST rebate based on processing the two input streams sequentially. A contingency cost of $500,000.00 for any approved additional work, and a consulting services cost of $238,000.00 have also been budgeted for a total project capital cost of $11.2 million.

Financing in the amount of $8.0 million has been provided for in the approved 1998 Capital Works Program under Project C-SW004 - Recycling Facilities, based on initial planning estimates. It is recommended that financing in the amount of $3.2 million be transferred from Project C-SW360 - Recycling to accommodate the shortfall in financing resulting from this Request for Proposals process. Total financing in the amount of $31.1 million has been approved for the Recycling Project to date. Expenditures totalling $26.1 million for the period ending December 31, 1997, have been incurred. Of the remaining $5.0 million available, an amount of $1.0 million is required in 1998 for backyard composter and public education. Should the transfer be approved, the Department will be required to seek additional financing for recycling activities as they are required in future years.

An additional $28.7 million has also been identified under Project C-SW004 for the proposed expansion of the facility after the evaluation phase. The projected capital cost for expansion of the facility, based on the selected technology, is now estimated at $19 to $22 million, and therefore the additional $3.2 million required for the evaluation phase would be potentially offset by an estimated saving of $6.7 to $9.7 million at the expansion phase.

The revised operating fee schedule, based on processing the two streams sequentially, is shown below:

Operating Fee Schedule

(1)Mixed Waste (based on 15,000 tonnes per year input):

Total OperatingOperating Cost

Cost Per Tonne

Year 1$960,805.00$64.05

Year 2$1,019,496.00$67.97

Year 3$1,019,496.00$67.97

(2)Source-Separated Organics (based on 25,000 tonnes per year input):

Total OperatingOperating Cost

Cost Per Tonne

Year 1$870,061.00$34.80

Year 2$945,542.00$37.82

Year 3$945,542.00$37.82

Notes:(1)All fees exclude any applicable GST.

(2)Year 2 and 3 fees are subject to inflation indexing based on the Consumer Price Index.

(3)If both streams are delivered to the facility during a one-year period, the operating fees will be pro-rated based on the number of weeks each stream is delivered.

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Attachment 4

Mixed Waste Recycling And Organics Processing Facility

Financial Analysis

1)Small Scale Facility:

Capital Cost:$10.4 million

Annualized Capital Cost:$1.2 million

Operating Costs/ (Benefits)

*MW = mixed waste; SSO = source separated organics

NOTES:

(1)Disposal cost savings based on marginal cost savings at transfer stations and Keele Valley Landfill of $12/tonne for 3,500 tonnes of mixed waste (MW) and 9,000 tonnes of source-separated organics (SSO) in Year 1, and for 7,000 tonnes of MW or 18,000 tonnes of SSO in Year 2. Disposal savings for Year 3 based on avoided transfer and contracted disposal costs of $60/tonne for 7,000 tonnes of MW or 18,000 tonnes of SSO.

(2)Tipping fee revenue in Year 1 based on 2,500 tonnes of MW at $60/tonne and 2,500 tonnes of SSO at $50/tonne delivered by the private sector, less $12/tonne for disposal of residual material. Year 2 and 3 tipping fee revenue based on 5,000 tonnes of MW at $60/tonne or 5,000 tonnes of SSO at $50/tonne, less residual disposal costs.

(3)SSO collection costs estimated at $60/tonne for 50 percent of collected tonnes. Assumes that 50 percent is kitchen organics and other 50 percent is yard waste currently collected separately. Cost may be reduced to $0 if facility receives organics rich mixed waste from downtown core instead of SSO, or if mixed waste and source-separated organics are co-collected on the same truck.

(2)Full Scale Facility:

Estimated Capital Cost:$30.1 million

Annualized Capital Cost:$3.8 million

Estimated Operating Cost/(Benefits)

*MW = mixed waste; SSO = source separated organics

NOTES:

(1)Disposal cost savings based on avoided transfer and contracted disposal costs of $70/tonne for 63,000 TPY of municipal mixed waste (MW) or $60/tonne for 135,000 TPY of municipal source-separated organics (SSO).

(2)Tipping fee revenue based on 10,000 tonnes of mixed waste at $60/tonne or 15,000 tonnes of SSO at $50/tonne delivered by the private sector, less $60/tonne residual disposal costs.

(3)Net additional SSO collection costs estimated at $45/tonne for 50 percent of collected tonnes. Assumes that 50 percent is kitchen organics and other 50 percent is yard waste currently collected separately. Cost may be reduced to $0 if facility receives organics rich commercial waste from downtown core and/or frequency of residential waste collection is reduced, and/or if mixed waste and SSO are co-collected on the same truck.

(4)Energy revenue based on sales of 1 MW of electricity from mixed waste plant and 2 MW of electricity from SSO plant at a price of $.06 per KWh.

(5)Material revenue from mixed waste plant based on 42,000 tonnes of compost at $20/tonne and 840 tonnes of aluminum cans at $1,200/tonne. Material revenue from SSO plant based on 50,000 tonnes of compost at $20/tonne.

(6)Based on estimated operating fees of $30/tonne for mixed waste and $20/tonne for SSO.

7

Allocation of Parks Levy Funds - Harbourfront Parks Improvement

(Ward 24 - Downtown)

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (July 8, 1998) from the Commissioner, Economic Development, Culture and Tourism, wherein it is recommended:

(1)That City Council authorize the allocation of Park Levy funds in the amount of $177,611.09 to be paid by Atrium on Queens Quay Inc. for the development at 650 Queens Quay West to Harbourfront Capital Account 216-491 for the Commissioner, Economic Development, Culture & Tourism to be treated as partial fulfilment of the Second Parks Improvement Payment and expended for the purposes set out in the Harbourfront Letter Agreement, dated October 6, 1992; and

(2)That the appropriate City Officials be authorized to take the actions necessary to implement the foregoing.

Background:

The Budget Committee on July 28, 1998, had before it the following:

(1)a report (July 8, 1998) from the Commissioner, Economic Development, Culture and Tourism regarding the allocation of Parks Levy Funds for Harbourfront Parks Improvement (Ward 24 - Downtown); and

(2)a joint report (July 24, 1998) from the Commissioner, Economic Development, Culture and Tourism and the City Solicitor.

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(Joint report dated July 24, 1998 addressed to the Budget Committee from the

Commissioner of Economic Development, Culture and Tourism and the City Solicitor)

Purpose:

To respond to the request of the Budget Committee for further background information concerning the above matter, arising out of the report of the Commissioner, Economic Development, Culture & Tourism (July 8, 1998).

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendations:

It is recommended that this report be received for information

Comments:

Your Committee has requested further background information on the allocation of parks levy funds for park development purposes in the Harbourfront area, as recommended in the report of the Commissioner, Economic Development, Culture & Tourism of July 8, 1998.

As a general principle of contract law, when the City receives funds for parks development or other purposes under an agreement, it is bound to apply those funds in accordance with the provisions of that agreement.

Under the Harbourfront Implementation Agreement dated October 6, 1992, the Federal Government agreed with the City to create certain obligations in respect of Parkland Development funding for the Harbourfront area which would attach to various development parcels and which would become payable as those parcels proceed through the development approval process.

In the case of Parcel BQ-6 (650 Queens Quay West), a total of $1.5 million is committed to the City in two instalments. The first amount of $500,000.00 was paid when the first building permit was issued for the site. The balance of $1.0 million will be payable 90 days after condominium plan registration.

The Agreement requires that these funds be applied for "park design and construction" on park sites acquired by the City in the Harbourfront planning area.

These payments substitute for the usual parks levy: the Agreement provides that the City will make no further requests of Harbourfront or any successor property owners for parkland development funds. The former City's practice was to exempt individual sites from the Parks Levy By-law as parkland payments were made under the Agreement.

In the case of 650 Queens Quay West, the current owner has confirmed its obligations to the City pursuant to the Harbourfront Agreement. The site should not be exempted from the Parks Levy By-law until the final payment has been made after condominium plan registration. However, the owner has paid the parks levy in order to obtain a building permit. These funds will be credited against the balance owing upon condominium plan registration and should be considered a pre-payment of a portion of the final $1 million.

The Letter of Credit mentioned in the previous report is for security to ensure the payment of the balance owing. It will be delivered to the City when the owner applies for draft condominium plan approval.

This report was prepared in consultation with the Chief Administrative Officer, who concurs.

Contact Name:

Robert Balfour, SolicitorTelephone:(416) 392-7225

Fax:(416) 392-0024

E-Mail:rbalfour@toronto.ca

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(Report dated July 8, 1998 addressed to the Budget Committee

from the Commissioner, Economic Development, Culture and Tourism)

Purpose:

To obtain approval for the allocation of $177,611.09 in Parks Levy funds to be paid in 1998 towards the improvement of Harbourfront parklands.

Source of Funds:

Parks Levy Payment to be submitted by Atrium on Queens Quay Inc. for the development at 650 Queens Quay West.

Recommendations:

(1)That City Council authorize the allocation of Park Levy funds in the amount of $177,611.09 to be paid by Atrium on Queens Quay Inc. for the development at 650 Queens Quay West to Harbourfront Capital Account 216-491 for the Commissioner of Economic Development, Culture & Tourism to be treated as partial fulfilment of the Second Parks Improvement Payment and expended for the purposes set out in the Harbourfront Letter Agreement, dated October 6, 1992; and

(2)That the appropriate City officials be authorized to take the actions necessary to implement the foregoing.

Comments:

A Parks Levy payment of $177,611.09 has been made for the development at 650 Queen Quay West to partially fulfil Parks Improvement Payments pursuant to the Harbourfront Letter Agreement, dated October, 1992. Under the terms of the agreement, the owners of Parcel BQ6 (650 Queens Quay West) are required to pay the City $1.5 million for parks improvements in Harbourfront. The First Parks Improvement Payment of $500,000.00 has been paid and the Second Parks Improvement Payment of $1 million is to be paid 90 days after condominium registration. As a measure to secure the Second Parks Improvement Payment, the developer is prepared to provide a letter of credit as a condition of draft condominium plan approval on the basis that the Parks Levy will be treated as partial fulfilment of the Second Parks Improvement Payment.

Funds from the Parks Improvement Payment as provided by the Harbourfront Letter Agreement were anticipated in the 1998 Capital Budget. Council's actions respecting the allocation of Parks Levy funds submitted in 1998 require Council authority to allocate the Parks Levy for 650 Queens Quay West the Harbourfont Capital Account.

Contact Name:

Susan Richardson, Director, Development and Support, Tel: 392-1941, Fax: 392-0845, e-mail: srichard@toronto.ca.

8

510 Spadina - Roadway Changes to Improve Safety

(Downtown)

(City Council on July 29, 30and 31, 1998, amended this Clause:

(1)to provide that the source of funding be from the Transportation Capital Budget; and the specific program to be identified by the General Manager, Transportation Services, in a further report to the Budget Committee; and

(2)by adding thereto the following:

"It is further recommended that:

(1)the Chief General Manager, Toronto Transit Commission, and the General Manager, Transportation Services be requested to submit a report to the Budget Committee in January, 1999, on a permanent solution and the source of funding; and

(2)in order to give effect to the recommendations of the Toronto Community Council, embodied in Clause No. 45 of Report No. 8 of The Toronto Community Council, and approved by City Council on July 8, 9 and 10, 1998, with respect to the resultant turn prohibitions:

(a)the existing prohibition of left-turn movements to and from all unsignalized driveways and laneways at Spadina Avenue, between Front Street West and Spadina Circle, be extended to be in effect at all times;

(b)the existing prohibition of through movements across Spadina Avenue from and to all unsignalized driveways and laneways between Front Street West and Spadina Circle, be extended to be in effect at all times; and

(c)the appropriate by-laws be amended accordingly.")

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (July 27, 1998) from the Chief Financial Officer and Treasurer, wherein it is recommended:

(1)the construction of the barriers be incorporated to the TTC capital project #385 Spadina LRT;

(2)additional financing approval be provided in the amount of $100,000.00, 75 percent to be funded from the TTC Capital Subsidy Reserve and the balance of 25 percent to be funded from Capital from Current; and

(3)appropriate staff be authorized to undertake any necessary actions to implement these initiatives.

Background:

The Budget Committee on July 28, 1998, had before it the following:

(1)report (July 27, 1998) from the Chief Financial Officer and Treasurer regarding TTC -510 Spadina: Roadway Changes to Improve Safety; and

(2)communication (July 24, 1998) from the General Secretary, Toronto Transit Commission regarding 510 Spadina: Roadway Changes to Improve Safety.

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(Report dated July 27, 1998, addressed to the Budget Committee

from the Chief Financial Officer and Treasurer)

Purpose:

To identify the cost of installing temporary barriers on the Spadina LRT in order to reduce accidents and to recommend the funding sources for that purpose.

Financial Implications:

The recommendations contained in this report would result in an increase in financing requirements in 1998 of $100 thousand. There is currently no allowance for this purpose in the approved capital program for the TTC.

Recommendations:

It is recommended that:

(1)the construction of the barriers be incorporated to the TTC capital project #385 Spadina LRT;

(2)additional financing approval be provided in the amount of $100 thousand, 75 percent to be funded from the TTC Capital Subsidy Reserve and the balance of 25 percent to be funded from Capital from Current; and

(3)appropriate staff be authorized to undertake any necessary actions to implement these initiatives.

Council Reference/Background:

At its meeting on July 8 and 9, 1998, Council adopted the recommendation from the Toronto Community Council that in order to address traffic safety concerns on the section of Spadina Avenue extending from Front to College Streets, temporary barriers be installed between signalized intersections to prevent vehicles crossing the streetcar tracks, with breaks in the barriers to accommodate left-turn movements at all non-signalized intersections except those at D'Arcy Street and Glen Baillie Place, Oxley Street and Front Street to the northern edge of Wellington Street West.

The Budget Committee on July 13, 1998, requested that staff report directly to the next Budget Committee meeting scheduled for July 28, 1998 on the funding needed to install barriers on the Spadina LRT in order to reduce accidents.

Discussion:

A previous report from the TTC dated June 30, 1998 recommended to install temporary curbs along both sides of the streetcar right-of-way on Spadina Avenue, from Spadina Circle to Front Street, so that motorists were physically prevented from driving onto, or turning across, the streetcar tracks, except where permitted at signalized intersections. The proposal was comprehensive and included all unsignalized intersections. The estimated cost of installing temporary curbing on Spadina Avenue was $340 thousand.

The recommendation from the Toronto Community Council approved by Council on July 8, 1998 differs from the TTC recommended solution, among other aspects, by introducing breaks in the barriers at non-signalized intersections.

The Transportation Department is currently working on the design of options to implement the recommendation approved by Council. Staff indicate that the cost of the barriers will depend on the option finally implemented. If barriers of temporary condition are installed the estimated cost would be approximately $100 thousand. However, if a more permanent barrier is chosen, costs will be higher.

Staff of the Transportation Department indicate that their responsibility concerns only to the design of the barriers as part of the departmental authority over the road. They also indicate that given that the barriers will be installed along both sides of the streetcar right-of-way and are required to physically prevent cars from driving into the streetcar tracks, the cost should be included in the Spadina LRT capital project within the TTC Capital Program.

There is currently no funding approved for the barriers in the TTC approved capital budget. The Spadina LRT project was originally funded 75 percent. by the Province and 25 percent. by the City. It is therefore recommended to recognize the project increase at the currently estimated cost ($100 thousand) and to provide the required financing 75 percent from the TTC Capital Subsidy Reserve Fund (this reserve fund contains the remaining Provincial funding related to the Capital Subsidy Agreement which is being prepaid by the Province) and the balance of 25 percent to be funded from Capital from Current.

Conclusions:

The installation of the barriers will cost at least $100 thousand depending on the option finally implemented. The cost should be included in the Spadina LRT capital project within the TTC Capital Program and could be treated either as an over expenditure or as a project increase. It is recommended to recognize the project increase at the currently estimated cost ($100 thousand), and to provide the required financing 75 percent. from the TTC Capital Subsidy Reserve Fund (this reserve fund contains the remaining Provincial funding related to the Capital Subsidy Agreement which is being prepaid by the Province) and the balance of 25 percent to be funded from Capital from Current.

Contact Name:

Shekhar Prasad, telephone: 392-8095; fax: 392-3649

Internet: shekhar_prasad@metrodesk.metrotor.on.ca

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(Communication dated July 24, 1998, addressed to the Interim Contact of the Budget Committee

from the General Secretary, Toronto Transit Commission )

I am responding to your July 16, 1998 letter in which you explained that the Budget Committee, on July 13, 1998, requested that staff report directly to the next Budget Committee meeting, scheduled for July 28, 1998, on the funding needed to install barriers on the Spadina LRT in order to reduce accidents.

The recommendation to install temporary barriers on Spadina Avenue, between College and Front Streets, in order to address traffic safety concerns and to reduce accidents, was made by the Toronto Community Council, and was adopted by the Council of the City of Toronto at its meeting of July8and 9, 1998. Specifically, City Council adopted, without amendment, a clause embodied in Report No. 8 of the Toronto Community Council. As such, the current initiative to install temporary barriers has come from the Toronto Community Council and Toronto City Council, and funding for these barriers should be provided by the City of Toronto. Since traffic safety and roadway improvements are the responsibility of the city's Transportation Department, logically that department should provide the funding for this traffic safety improvement.

Based on recent discussions with Transportation Department staff, we believe that the type of temporary barriers which that department will be recommending would cost no more than $150,000.00.

The automobile-streetcar collision problem on Spadina Avenue is of the highest concern to the TTC, and we are anxious to have the temporary barriers installed as quickly as possible. Therefore, while the TTC recommends to Budget Committee that the City of Toronto provide the funding for such barriers, the TTC is prepared to immediately provide the funding for the temporary barriers, on an interim basis, in the interests of immediately improving the safety of travel for all users of Spadina Avenue, but particularly to improve the safety of our own streetcar operations on that road.

9

Window Improvement Project - Toronto City Hall

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends that:

(1)all windows on the second floor of City Hall be replaced;

(2)the Commissioner of Corporate Services issue a Request for Proposal Call for the replacement of the second floor windows, as outlined in the joint report (June 26, 1998) from the Commissioners of Corporate Services and Works and Emergency Services, addressed to the Sub-Committee for the Relocation of All Members of Council to City Hall and the Toronto Atmospheric Fund;

(3)the Toronto Atmospheric Fund (TAF) accept the joint report (June 26, 1998) from the Commissioners of Corporate Services and Works and Emergency Services, as it pertains to Recommendation No. (1) above, in consideration of the City's interest in securing a repayable loan from the TAF to cover all costs associated with the window replacement proposal selected by the City;

(4)the joint report (June 26, 1998) from the Commissioners of Corporate Services and Works and Emergency Services be forwarded to the Toronto Historical Board for information;

(5)consideration of the replacement of the remaining windows at City Hall be deferred until September, 1998 and the Commissioners of Corporate Services and Works and Emergency Services be requested to submit a comprehensive report on this matter to the Corporate Services Committee; and

(6)appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

The Strategic Policies and Priorities Committee submits the following transmittal letter (July29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the recommendations embodied in the report (July 23, 1998) from the Commissioner of Corporate Services be struck out and substitute in lieu thereof the following:

(1)that windows on the second floor facing Nathan Phillips Square be replaced; and

(2)that the Toronto Atmospheric Fund (TAF) provide an interest free loan for the payment of same.

Background:

The Budget Committee had before it the following:

(1)report (July 23, 1998) from the Commissioner of Corporate Services regarding Funding for Phase 1 of the Window Improvement Project - Toronto City Hall; and

(2)a transmittal letter (July 24, 1998) from the City Clerk regard Window Improvement Project - Toronto City Hall.

Councillor Ron Moeser addressed the Committee in connection with this matter.

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(Report dated July 23, 1998, titled, "Funding for Phase 1 of the Window Improvement Project -

Toronto City Hall", addressed to the Budget Committee and the Toronto Atmospheric Fund,

from the Commissioner of Corporate Services)

Purpose:

To obtain funding approval for the replacement of all windows on the ground and second floors and Council Chamber as a part of the overall Window Improvement Project - Toronto City Hall, in order to complete installation by December 31, 1998.

Funding Sources, Financial Implications and Impact Statement:

The total cost to complete Phase 1 of the Window Improvement Project for Toronto City Hall including the design, production, installation and contingency, is estimated at $2,100,000 plus GST.

Recommendations:

It is recommended that:

(1) due to the urgency to proceed with this project in a timely manner, funds in the amount of $2,100,000 plus GST be authorized for Phase 1 of the Window Improvement Project at Toronto City Hall;

(2)despite By-law Nos. 7-1998 and 57-1998, as amended, the Chief Administrative Officer be authorized to award the contract to and the City be authorized to enter into an agreement with the successful proponent for Phase 1 for a cost not greater than the amount set out above in recommendation (1);

(3)the Toronto Atmospheric Fund (TAF) accept this report as the City's formal expression of interest to obtain a TAF loan in the amount of $2,100,000 plus GST, and that any further relevant information required by TAF for the expeditious approval of this loan, be supplied by city staff;

(4)I report back to your Committee on the terms, conditions and other relevant issues pertaining to this loan and to the funding of both Phases 1 and 2 of the Window Improvement Project; and

(5) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

The Corporate Services Committee at its meeting of July 20, 1998 adopted the joint report of the Commissioner of Works and Emergency Services and myself dated June 26, 1998 entitled "Window Improvement Project - Toronto City Hall" and referred it to Budget Committee.

Comments and/or Discussion and/or Justification:

This Window Improvement Project will be undertaken in stages to coincide with phased renovations of City Hall beginning with the ground and second floor, and Council Chamber as part of the Phase1 renovations for the relocation of all Members of Council to City Hall, and each of the towers in subsequent phases.

In order to ensure that Phase 1 of the Window Improvement Project is completed on scheduled this fall, it has become necessary to accelerate the approval process by requesting authorization to immediately proceed with the implementation of Phase 1. A Quotation Call has been issued by the Purchasing and Material Management Division to interested parties for the design, supply and installation services for the entire Window Improvement Project (Phases 1 and 2).

Estimated Budget for Window Improvement Program:

Total glazed area for the entire City Hall complex is 9000 m².

Total glazed are for the entire City Hall complex is 9,000 m². Approximately $550 per m² has been allocated to acquire commercially mature window technology of the highest efficiency.

Phase 1

Council Chamber$ 605,000.00

First and Second Floors$1,265,000.00

Phase 2

East & West Towers $3,080,000.00

Total$4,950,000.00 + GST

The cost for Phase 1 is approximately $2.1 million (10 percent contingency included).

Toronto Atmospheric Fund:

The provision of this loan by TAF would be consistent with the mandate of TAF to provide support and funding for projects related to energy efficiency and global climate stabilization. The implementation of this project will also serve as a demonstration and education initiative to promote public understanding of global warming, its implications and the actions that can be taken to contribute to global climate stabilization.

Conclusions:

The approval of funding for Phase 1 will allow the successful proponent sufficient time to complete the installation of windows on the ground and second floors, and Council Chamber by December31, 1998. In the event that authorization to proceed with this project is delayed, it is unlikely that the Phase 1 work would be completed on schedule.

In consideration of the above , I am requesting that funds in the amount of $2,100,000 exclusive of GST be approved by your Committee for Phase 1 of the Window Improvement Project at Toronto City Hall.

Contact Name and Telephone Number:

Cathie Macdonald, Interim Lead

Facilities & Real Estate Division

Toronto Community Council Area

Phone: (416) 392-0449

Fax: (416) 392-0029

E-mail: "cmacdona@toronto.ca"

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(Transmittal Letter dated July 24, 1998, addressed to the Budget Committee,

from the Corporate Services Committee)

Recommendation:

The Corporate Services Committee on July 20, 1998, recommended to the Budget Committee and Council, the adoption of the Recommendation of the Sub-Committee for the Relocation of All Members of Council to City Hall, embodied in the following communication (July 6, 1998) from the City Clerk, Sub-Committee for the Relocation of all Members of Council to City Hall, noting the Recommendations of the Board of Directors of the Toronto Atmospheric Fund, embodied in the communication (July 6, 1998) from the Board of Directors of the Toronto Atmospheric Fund.

Background:

The Corporate Services Committee on July 20, 1998, had before it the following communications:

(i)(July 6, 1998) from the City Clerk, Sub-Committee for the Relocation of All Members of Council to City Hall, advising that The Sub-Committee for the Relocation of All Members of Council to City Hall on June 29, 1998, recommended the endorsement of the joint report (June 26, 1998) from the Commissioners of Corporate Services and Works and Emergency Services respecting "Window Improvement Project - Toronto City Hall", wherein it is recommended that:

"(1)the Commissioner of Corporate Services issue a Request for Proposal call for the phased improvement of all City Hall windows as outlined in this report;

(2) the Toronto Atmospheric Fund (TAF) accept this report in consideration of the City's interest in securing a repayable loan from the TAF to cover all costs associated with the window replacement proposal selected by the City;

(3)this report be sent to the Toronto Historical Board for information; and

(4) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto."; and

(ii)(July 17, 1998) from the City Clerk, advising that City Council, on July 8, 9 and 10, 1998, during its consideration of Clause No.2 of Report No. 8 of the Special Committee to Review the Final Report of the Toronto Transition Team, headed "Toronto City Hall Renovations - Recommended Actions in Response to Committee and City Council Motions and Additional Phase One Budget Requirements", referred to the Corporate Services Committee for consideration, a communication dated July6, 1998, from the City Clerk, entitled "Window Improvement Project - Toronto City Hall", forwarding the recommendations of the Board of Directors of the Toronto Atmospheric Fund from its meeting held on July 6, 1998, viz:

"The Board of Directors of the Toronto Atmospheric Fund at its meeting on July 6, 1998:

(a)approved, in principle, the provision of a repayable loan to the City of Toronto for a window improvement project during the Phase 1 renovations at Toronto City Hall, subject to an acceptable interest rate being negotiated for the loan and subject to a repayment plan and agreement from City Council that interest on the loan as well as capital will be repaid in accordance with the terms of the loan;

(b)requested that City Council forward its approval to the Board of Directors of the Toronto Atmospheric Fund so that the legal required notice be given for a meeting of the Board for final approval;

(c)requested that full accounting of the energy and C02 emission savings of the project be calculated;

(d)indicated a preference for Option A - High Efficiency Windows as described in the report (June 26, 1998) from the Commissioners of Corporate Services and Works and Emergency Services."

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(Communication dated July 6, 1998, addressed to the Corporate Services Committee

from the City Clerk, Sub-Committee for the Relocation of All Members of Council to City Hall,

and the Special Committee to Review the Final Report of the Transition Team)

The Sub-Committee recommends the endorsement of the joint report (June 26, 1998) from Commissioners of Corporate Services and Works and Emergency Services respecting "Window Improvement Project - Toronto City Hall".

Background:

The Sub-Committee - Relocation of All Members of Council to City Hall on June 29, 1998, had before it the following joint report (June 26, 1998) from the Commissioners of Corporate Services and Works and Emergency Services respecting "Window Improvement Project - Toronto City Hall".

The Sub-Committee's recommendation is noted above.

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(Joint report dated June 26, 1998, addressed to the Sub-Committee for the Relocation of

All Members of Council to City Hall and the Toronto Atmospheric Fund

from the Commissioner of Corporate Services and Commissioner of Works and Emergency Services)

Purpose:

To report on the request to replace or improve Toronto City Hall windows with modern technology that would solve the problems of:

(1)Unacceptably high levels of heat loss which increase building operating costs;

(2)Condensation buildup which causes mold/mildew and deteriorated air quality;

(3)Cold air infiltration which makes the building drafty;

(4)Noise penetration emanating from events on Nathan Phillips Square; and

(5) Low relative humidity levels which cause occupant discomfort and complaints of dry air and static electricity.

The window replacement program would be done in stages to coincide with phased renovations of City Hall beginning with the first, second and other selected floors as part of the Phase 1 renovations and continuing with each of the towers in subsequent phases.

Funding Sources, Financial Implications and Impact Statement:

Preliminary discussions have taken place between the Toronto Atmospheric Fund and City Staff for the provision of a repayable loan to the City to cover all costs related to this window improvement project. The actual financial implications and impacts (including the magnitude of carbon dioxide emission savings) will be determined after detailed technical building and energy use simulations are conducted. Project costs will be recovered from energy savings.

Recommendations:

It is recommended that:

(1)the Commissioner of Corporate Services issue a Request for Proposal call for the phased improvement of all City Hall windows as outlined in this report;

(2)the Toronto Atmospheric Fund (TAF) accept this report in consideration of the City's interest in securing a repayable loan from the TAF to cover all costs associated with the window replacement proposal selected by the City;

(3)this report be sent to the Toronto Historical Board for information; and

(4) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

The Relocation Sub-Committee and Special Committee adopted a motion that I report, in consultation with the Energy Efficiency Office of Works and Emergency Services on a program to replace all City Hall windows with more energy efficient windows. This window replacement program would be undertaken in stages to coincide with the phased renovation of City Hall.

Comments and/or Discussion and/or Justification:

General:

Windows serve several important functions in the building envelope, including:

(1)Contribute to outdoor visual communication and profile;

(2)Control of solar radiation for light and heat;

(3)Assist with the occurrence of natural ventilation;

(4)Contribute to the structural integrity, safety, occupant comfort and security of the building; and

(5)Provide insulation of indoor environment from outdoor elements such as weather, dust, and noise.

Windows are the weak link in the building's thermal envelope. Traditional double pane insulating glass conducts heat 10 to 20 times faster than typical insulated walls. Investment in window replacements for strictly energy efficiency reasons is usually not economically feasible as the energy and cost savings are usually low resulting in a payback that cannot be justified in dollar savings. Windows replacement or improvement should be considered a long term capital expenditure as part of a comprehensive building renewal program. The decision to improve or replace windows is normally not based solely on energy efficiency. Other factors such as asset value, occupant comfort, architectural integrity and safety must be considered in any selection process. The existing single glazed windows at City Hall contribute or exacerbate the problems of occupant comfort complaints, increased operating costs, questionable air quality and building deterioration. Any window replacement or improvement program should carefully considered all of the existing problems and possible solutions as well as the economics and qualitative benefits.

Toronto City Hall was designated as an historical building in the late 1980's and as such any alteration or modification to the building facade would require consultation with the Toronto Historical Board. Therefore I am recommending that this report be sent to the Toronto Historical Board for information and consultation.

In 1992, reflective window film was installed in the tower and podium windows to counteract increasing problems with rising interior temperatures in the cooling season, particularly the upper floors of the East Tower. This was due to increased building occupancy, increased internal heat gains from office equipment such as desktop computers, laser printers and photocopiers, and an extended air conditioning season due to unusually high temperatures.

Window Improvement Options:

Consultations with the Energy Efficiency Office of Works and Emergency Services have led to two potential approaches to arriving at a solution to the window performance problems being encountered.

Option A -Remove and replace existing windows with energy efficient technologically advanced windows; or,

Option B - Leave existing single glazed windows intact and install a second technologically advanced glazing on the interior of the window frame.

The dollar savings and project costs provided by the Energy Efficiency Office for each of the two options are the best estimates available using certain assumptions. Before a project of this magnitude is carried out, in-depth analysis and computer modelling is necessary to ensure accuracy of the projected savings.

The selection criteria for the replacement or improvement of the windows for this project are based on the following problems:

(1)Unacceptably high levels of heat loss which increase building operating costs;

(2)Condensation buildup which causes mould/mildew and deteriorated air quality;

(3)Cold air infiltration which makes the building drafty;

(4)Noise penetration emanating from events on Nathan Phillips Square;

(5)Low relative humidity levels which cause occupant discomfort and complaints of dry air and static electricity; and,

(6)Cost- The technology must be cost-effective with a payback not exceeding 25 years for the incremental cost of the project.

Option A - High Efficiency Windows:

Description:

This technology consists of a glazing unit with two layers of glass and two low-E films suspended in a highly insulated aluminum frame. The combination of a high performance glazing unit and insulated frame greatly improves the thermal performance of the window by preventing thermal bridging at the window frame. This technology effectively seals out the elements, eliminates drafts and promotes a near constant indoor glass temperature. It provides excellent noise attenuation and meets or exceeds all six standard selection criteria previously outlined.

Cost:

The cost for turnkey installation of this technology ranges between $500 and $600 per m² of window. This option includes the installation of new windows from the building exterior. Materials would be moved to appropriate floors via a material lift located on the exterior of the building. The work activities within the building interior would be minimal however occupants would be relocated temporarily as windows are being removed and replaced from the exterior of the building. The cost includes the supply and installation of new windows and the removal and recycling of the existing windows, exclusive of taxes. This option would clearly be the highest cost in absolute terms.

Total glazed area for the entire City Hall complex is 9,000 m² @ $550 per m²

East & West Towers - 5,600 m² $3,080,000.00

Council Chamber- 1,100 m²$ 605,000.00

Ground and Second Floors - 2,300 m²$1,265,000.00

$4,950,000.00 + GST

Savings:

Preliminary analysis indicates annual savings of $ 200,000.00 operating costs.

The associated savings are:

(1)$150,000.00 in heating costs; and,

(2)$50,000.00 in cooling costs.

The total savings of $200,000.00 in operating costs yield a simple payback of 25 years.

Benefits:

High efficiency window replacement will provide the City of Toronto numerous benefits which includes:

(i)Reduced cooling loads. Improved shading coefficients will greatly reduce the solar loading on the building.

(ii)Reduced heating loads. Lower u-value windows will provide a significant improvement over the non-thermally broken single glazed system presently installed in the building. The u-value of the existing windows is extremely high, and there is great heat loss through these windows.

(iii)The reduction in heating/cooling loads will greatly improve occupant thermal comfort. Glass surface temperatures will be much closer to room temperature maintaining a near symmetrical mean radiant temperature.

(iv)High sound transmission glass will help prevent the unwanted noise from entering the buildings.

(v)Unwanted air infiltration through the window system will be eliminated.

(vi)Virtually 100 percent of the Ultra-Violet light spectrum is blocked, thus preventing damage to UV sensitive finishes.

Option B - Interior Storm Windows:

Description:

An interior storm window improves the efficiency of a window by functioning as an additional transparent seal and barrier. These windows are designed to be easily attachable to the inside of an existing window using magnetic strips to hold the window in place. This allows for simple installation and removal. Interior storm windows have been used successfully in retrofits of historical buildings as alteration or modification of the building facade is not desirable. This option would require the installation of finished removable interior magnetic windows to be custom made to fit around the perimeter of each window, covering both the metal frame and glazed areas. A virtual air tight seal would be attained by the use of high powered adhesive sealants between the existing and new frames as well as by the magnetic seal between the PVC subframe and the magnetic window system frame.

The magnetic interior storm windows would complement the prior investment in window film and would in fact extend the life of the window film by providing protection against scratches and condensation.

Cost:

This option can be installed in phases with minimal extra costs as the construction of a swing stage or monorail system is not required.

East & West Towers (not stairs)$745,000.00

Council Chamber & Elevators$148,000.00

Ground and Second Floors$317,000.00

$1,210,000.00 + GST

Savings:

The associated projected savings are:

(1)$60,000.00 in heating costs; and,

(2)$40,000.00 in cooling costs.

The total savings of $100,000.00 in operating costs yield a simple payback of 12 years.

Benefits:

The qualitative benefits that would be obtained after the installation of the Option B - interior storm window include:

(1)Improved employee health and comfort - The increased relative humidity levels resulting from the installation should abate the constant employee complaints about dry air, static electricity etc.

(2)Enhance building environment - The increased relative humidity levels will enhance the building environment.

(3)Maintain Historical Integrity - An interior storm window does not alter or modify the existing building facade and preserves the historic City hall building facade.

(4)Reduce Noise Levels - An interior storm window would reduce noise penetrating into the towers from the activities on Nathan Phillips Square.

(5)Minimal Staff Disruption - Contrary to conventional window installation which involves the removal of existing windows potentially during business hours, the technology involved with Option B (Interior Storm Windows) can be installed from the interior of the building during off-hours (evening & weekends)

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A comparison of the two window retrofit/improvement options is contained in Table # 1.

Table No. 1

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Table No. 2 below shows the summary of savings cost and simple payback for the two technologies discussed in this report.

Table No. 2

A third option to be considered involves the replacement of the existing windows with double glazed gas filled technology. This option would be similar to Option A above, but would cost the City considerable less funds. It is reasonable to expect that window suppliers will be able to meet or exceed the selection criteria outlined in this report.

Conclusions:

As mentioned previously, the dollar savings and project costs provided by the Energy Efficiency Office above are the best estimates available using certain assumptions. Before a project of this magnitude is carried out, in-depth analysis and computer modelling is necessary to obtain the best estimates and to ensure accuracy of the projected savings.

The quantitative benefits i.e. energy and dollar savings indicate a significantly shorter simple payback for the installation of the Option B- Interior Storm Windows versus Option A- High Efficiency Windows.

In consideration of the above, I am recommending that the Commissioner of Corporate Services issue a Request for Proposal call for the improvement of all City Hall windows. This window replacement program would be undertaken in stages to coincide with phased renovations of City Hall beginning with the first, second and other selected floors as part of the Phase 1 renovations and each of the towers in subsequent phases. I am also recommending that the Toronto Atmospheric Fund (TAF) accept this report in consideration of the City's interest in securing a repayable loan from the TAF to cover all costs associated with the window replacement proposal selected by the City, with repayment from future savings.

Contact Name and Telephone Number:

Cathie MacdonaldEleanor McAteer

Interim Lead Director, Environmental Division

Facilities & Real Estate DivisionCity Works Services

Toronto Community Council AreaToronto Community Council Area

Phone: (416) 392-0449Phone: (416) 392-7763

Fax: (416) 392-0029Fax: (416) 392-1456

E-mail: "cmacdona@toronto.ca"E-mail: "emcateer@toronto.ca"

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(Communication dated July 17, 1998, addressed to the Corporate Services Committee

from the City Clerk.)

City Council, at its meeting held on July 8, 9 and 10, 1998, had before it Clause No. 2 of Report No.8 of The Special Committee to Review the Final Report of the Toronto Transition Team, headed "Toronto City Hall Renovations - Recommended Actions in Response to Committee and City Council Motions and Additional Phase One Budget Requirements".

Council also had before it, during consideration of the foregoing Clause, the following reports from the City Clerk:

(i)(July 6, 1998) forwarding the recommendations of the Board of Directors of the Toronto Atmospheric Fund from its meeting of July 6, 1998, with respect to a window improvement project during the Phase I renovations at Toronto City Hall; and

(ii)Clerk (July 8, 1998) setting out the actions taken by the Corporate Services Committee on July 8, 1998 with respect to the issue of funding for the renovations at Toronto City Hall.

Council adopted the following recommendations:

"It is recommended that:

(1)the recommendations of the Corporate Services Committee embodied in the transmittal letter dated July 8, 1998, from the City Clerk, be adopted, viz.:

"The Corporate Services Committee on July 8, 1998, recommended the adoption of the Recommendation of the Budget Committee embodied in the communication (June26, 1998) from the City Clerk, subject to striking out Recommendation No. (3) embodied in the report (June 16, 1998) from the Commissioner of Corporate Services and inserting in lieu the following:

'(3)$314,000.00 for two copy centres, two central serveries and two informal meeting rooms to serve members of City Council and for the City Clerk's office area and Mayor's support area to meet their business needs, be provided from the Transition Reserve Fund or from debt financing;',

so that the recommendations embodied in the report (June 16, 1998) from the Commissioner of Corporate Services shall now read as follows:

'(1)$5.2 million, approved by City Council on February 4 and 5, 1998, for the renovations to Toronto City Hall be provided from the Transition Reserve Fund, as recommended in the report of the Chief Administrative Officer, entitled "Transition Projects", before the Budget Committee on June 25, 1998;

(2)$1.14 million, approved by City Council on June 3 and 4, 1998, for improvements, be provided from the Equity Program and Access Improvements for City-Owned Buildings Account of the former City of Toronto;

(3)$314,000.00 for two copy centres, two central serveries and two informal meeting rooms to serve members of City Council and for the City Clerk's office area and Mayor's support area to meet their business needs, be provided from the Transition Reserve Fund or from debt financing; and

(4)$240,000.00 for improved lighting on the second floor and improved wayfinding, be provided from the Equity Program and Access Improvements for City-Owned Buildings Account of the former City of Toronto, if approved by City Council when it considers the report of the Commissioner of Corporate Services, "Toronto City Hall Renovations - Recommended Actions in Response to Committee and City Council Motions and Additional Phase 1 Budget Requirements", dated June 16, 1998, submitted to the Sub-Committee for the Relocation of All Members of Council to City Hall for its meeting of June 23, 1998.'; and

(2)the communication dated July 6, 1998, from the City Clerk, entitled 'Window Improvement Project - Toronto City Hall', forwarding the recommendations of the Board of Directors of the Toronto Atmospheric Fund from its meeting held on July6, 1998, in this regard, be referred to the Corporate Services Committee for consideration."

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Copies of the following communications referred to in the letter dated July 17, 1998, have been circulated to all Members of Council at City Council's meeting of July 8, 9, and 10, 1998, and copies thereof are on file in the office of the City Clerk:

-(July 6, 1998) forwarding the recommendations of the Board of Directors of the Toronto Atmospheric Fund from its meeting of July 6, 1998, with respect to a window improvement project during the Phase I renovations at Toronto City Hall; and

-(July 8, 1998) setting out the actions taken by the Corporate Services Committee on July 8, 1998 with respect to the issue of funding for the renovations at Toronto City Hall.

10

System Standardization for Housing

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (July 21, 1998) from the Commissioner of Corporate Services, wherein it is recommended:

(1)that the original funding requested, less $33,000, be approved;

(2)that the 1998 funding in the amount of $220,000.00 be provided from the Transitional Reserve Fund; and

(3)that the appropriate City of Toronto officials be authorized to take the necessary action to give effect thereto.

Background:

The Budget Committee had before it a report (July 21, 1998) from the Commissioner of Corporate Services regarding System Standardization for Housing.

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(Report dated July 21, 1998, addressed to the Budget Committee

from the Commissioner of Corporate Services)

Purpose:

This report requests approval from the Budget Committee for the funding of a Transition Project HOU 02 for Housing to standardize its systems infrastructure as a result of the amalgamation of the Metropolitan Toronto Housing Company and Toronto CityHome.

Funding Sources, Financial Implications and Impact Statement:

Transitional project funding.

Recommendations:

(1)That the original funding requested, less $33,000, be approved; and

(2)That the appropriate City of Toronto officials be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

N/A

Comments and/or Discussion and/or Justification:

At the meeting of the Budget Committee on July 13 1998, the original request for funding was referred to Corporate Services for their evaluation.

Currently, the two organizations utilize different technology architectures and this incompatibility prohibits the relocation of staff and generates additional expense for maintenance of a more complex infrastructure. Standardizing and simplification of the infrastructure will result in future reduced support costs, increased availability and business flexibility.

Meetings and discussions between Housing and Corporate Services were held. As a result of this collaboration, $33,000 of the original request (23k in 1998 and 10k in 1999) does not need to be incurred. These savings will be achieved by using Corporate Services staff for network planning and using the test lab facilities at 703 Don Mills to develop the new desktop and network configurations. Contractor resources will still be required to augment Housing staff for the implementations of the system standards and Housing will use, as it has in the past, the established process for hiring such resources.

Conclusions:

We also noted that many of the changes that will occur in this project are necessary for Year 2000 readiness and need to be done, regardless, to ensure that the tenants of, and applicants for Housing are well served in the new century. The Year 2000 Project Office will ensure that duplication of this task will not occur.

Contact Name:

Jim Andrew, Executive Director

Information & Technology

392-8421

11

Financial Impacts from OMERS Surplus Position

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (July 24, 1998) from the Chief Financial Officer and Treasurer, subject to adding the words, "or operating" after the word, "capital" in Recommendation No. (2), to read as follows:

"(2)Any funds not required to be remitted by the City to OMERS as a result of the contribution holiday should be transferred to the Employee Reserve Fund pending a future report on the various city requirements for one time funding including funding employee benefit liabilities, funding an OMERS Type 7 program, funding transition projects, and funding any other one time capital expenditures such as Year 2000 projects. These funds should not be used to deal with ongoing city capital or operating pressures."

Background:

The Budget Committee had before it a report (July 24, 1998) from the Chief Financial Officer and Treasurer regarding financial impacts from OMERS surplus position.

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(Report dated July 24, 1998 addressed to the Budget Committee

from the Chief Financial Officer and Treasurer)

Purpose:

To inform Budget Committee and Council of potential financial impacts arising from the latest OMERS surplus position.

Financial Implications:

The OMERS Board of Directors have recently approved a complete employer and employee contribution holiday beginning in August 1998 for a period of one year at a minimum. This will reduce the City's benefit expenses in both the 1998 and 1999 operating budgets. However, this report's recommendations, if adopted, will not impact either the 1998 or 1999 operating budgets.

Recommendations:

It is recommended that:

(1)Given the magnitude of the proposed contribution holiday and the Board's own plan to consult broadly over the next year on a longer term strategy for dealing fairly with all associated parties, the city's operating budgets should not be reduced in the short term as a result of the contribution holiday for both the city and its employees in the OMERS plan.

(2)Any funds not required to be remitted by the City to OMERS as a result of the contribution holiday should be transferred to the Employee Reserve Fund pending a future report on the various city requirements for one time funding including funding employee benefit liabilities, funding an OMERS Type 7 program, funding transition projects, and funding any other one time capital expenditures such as Year 2000 projects. These funds should not be used to deal with ongoing city capital pressures.

(3)Negotiations continue with the appropriate parties regarding the release of the OMERS Type 3 surplus. The former City of York's Type 3 fund has a balance of $3 million and the Metropolitan Toronto Police Type 3 fund has a balance of $77 million. The OMERS Board of Directors should be requested to explore mechanisms to release the funds to the City and not be restricted by the OMERS contribution holiday before access to the fund can be granted.

Discussion:

The actuarial review of the OMERS pension plan for the year ended December 31, 1995 has identified that the OMERS plan is in a surplus position over the coming years that would put it in potential violation of Income Tax Act legislation. The Income Tax Act limits the amount of surplus to 110 percent ie that assets of the plan cannot exceed the liabilities of the plan by more than 110 percent.

Through the 1980's, the OMERS Board has maintained the plan surplus within these limits by improving benefits including introducing the 90 factor, improving the survivor benefits from 50 to 60 percent and implementing adhoc indexing to pensioners. In the early 1990's, consensus was reached among the interested parties - employers, active members and pensioners to further improve benefits to provide for 70 percent contractual indexing which increased contribution rates by one half percent. The OMERS fully funded Type 7 plan was also introduced during the social contract period to aid in downsizing plans of municipalities.

The review of the 1995 surplus position resulted in the recent approval in November 1997 by the Provincial government of the OMERS Board recommended Five Year Initiative. This initiative provided the following:

-2 percent contribution reduction for employers and active members (to be reviewed annually)

-reducing the early retirement penalty from 5 percent to 2.5 percent

-introducing the 85/80 factor

These initiatives are implemented for a five year period. Other permanent changes made provide for benefit improvements including improving the spousal pension to 66 2/3 percent and providing an inflation catch-up to pensions. The cost of the Five Year Initiative was a $520 million expense to the plan from the benefit changes and a revenue reduction to the plan of $1.5 billion from reduced contributions.

Surplus growth has occurred because actual experience is differing from expectations and historical trends. There has been low inflation, continuing low wage growth, continued high investment returns and a contribution rate increase all since 1990. Each variable on its own would generate surplus but the current situation finds the OMERS plan with each of the variables moving in the same direction.

In terms of dealing with any surplus, the OMERS Board must look to the Income Tax Act where as stated previously, the upper limit of 110 percent for OMERS is mandated. At this point, the Income Tax Act requires employer contributions to stop. The OMERS Act requires that if the employer contributions stop, so must the employees and the Board shall reduce contributions. The Ontario Pension Benefits Act provides that contribution holidays are acceptable as well as contemplating that a surplus refund may occur for members and pensioners.

The December 31, 1996 valuation highlights that the OMERS plan is in a 114.6 percent surplus position excluding the Five Year Initiative. Even after including the Five Year Initiative which will kick in this year, the plan surplus is significantly higher over the next 20 years than the Income Tax limit of 110 percent. In other words, the Five Year Initiative is not expected to reduce the surplus enough to comply with the Income Tax Act. Therefore, further action is necessary.

The OMERS plan manages with certain objectives - to provide secure benefits ie to fulfill the pension promise, to provide competitive benefits, to provide for stable contribution rates, to provide for flexibility in meeting the needs of members and employers, and to provide prudent management at a reasonable cost. The plan provides that contributions to the plan are equal between employers and employees and that deficiencies in the plan are shared equally between active members and employers. With respect to a surplus, in a contribution holiday, employers and active members share equally and in a surplus withdrawal, employers and active members share equally. All other changes require broad consensus and provincial government approval.

Surplus Management Options

The OMERS Board is reviewing various options to reduce the plan surplus. It can consider a full contribution holiday, reduced contributions, the 'dividend' concept, or provide benefit enhancements. The full contribution holiday is within Board authority and can be done in several ways - a full holiday for a period or a stop and start. Contributions can be reduced by another 3 percent or 4 percent or the existing reduction can be extended even indefinitely. This approach is also within Board authority and is a gradual, prudent use of surplus but may not be sufficient to satisfy the Income Tax Act. The 'dividend' concept would be a one time or periodic cash payment or distribution of assets that would be to pensioners and to active members. Employers could only get a contribution holiday. The final option considers benefit enhancements. Significant changes in benefits will have long term impact and could increase contributions in the long term. Some of the changes that are identified include providing retirement up to 15 years early, implementing an 80/75 factor, and providing a subsidized Type 7 plan.

The OMERS Board Strategy

The Board is implementing a 12 month contribution holiday for members and employers beginning August 1, 1998 and will thoroughly analyze further options with target implementation prior to August 1, 1999. Additional consultation with employer and employee groups will be taking place when the Board has the costs of the various benefit proposals.

City of Toronto Impact

The 2 percent contribution reduction in the Five Year Initiative has provided reduced costs to the City in the 1998 Operating Budget of $29 million. A full contribution holiday effective August1,1998 will reduce the City's contribution by an additional $24 million in 1998 and a further $50 million in 1999. Likewise, employees will see no contributions to OMERS on their pay cheques which will in effect provide a net pay increase even after the increased taxable income that results from no pension deduction for income tax purposes.

Because the OMERS Board is invoking the full contribution holiday in order to deal with the short term issue of Income Tax compliance, and because other longer term measures will be recommended by the Board by this time next year, it is strongly recommended that the City take no action to reduce the 1998 Operating Budget nor take any action to reduce the 1999 Operating Budget as a result of this short term action. Rather, the savings from this contribution holiday should be transferred to the City's Employee Benefit Reserve Fund.

The City is undergoing financial stress from a number of different areas. First, city departments have been given downsizing targets that are very aggressive in timing. All efforts are underway to meet these targets. Second, the City on a capital basis has major issues from continued implementation of TTC capital downloading, potential social housing downloading costs, City facility rehabilitation, Year 2000 technology projects and transition projects that can easily add up to millions of dollars of needed onetime funds. Third, the City has unfunded employee liabilities that are estimated to be close to one billion dollars. There will be in the near future a requirement for municipalities to begin to fund these liabilities. All of these pressures need to be assessed and prioritized so that in October 1998 when the five year capital plan is being considered, various options on the use of the reduced OMERS contributions can be discussed.

OMERS Type III Surplus - Toronto Police Services

A very recent court ruling allocated the Service's $77 million OMERS Type III surplus equally between the Association and the Board.

It is important to note that the $39 million employer's portion will not be remitted as a lump-sum payment from OMERS to the Board. Legislation stipulates that this portion can only be realized through rate adjustments in the contributions to the plan. This issue is further complicated by the fact that no contributions will be made for one year beginning in August, 1998, due to the OMERS "holiday."

Furthermore, in anticipation of the ruling, the Service did not remit three months' payments to OMERS (for May, June and July), in the aggregate amount of $4 million. This course of action, which was agreed to by OMERS, will result in the Service's having the corresponding excess funds available for 1998, and will also reduce the surplus receivable from OMERS to $35 million.

Conclusion:

The OMERS pension plan is in the enviable position of being in a major surplus position that requires the OMERS Board to act swiftly to be in compliance with the Income Tax Act. Accordingly, a full contribution holiday for employers and active members is recommended by the Board for implementation on August 1, 1998. Consultations between all interested parties will be ongoing to consider a longer term solution to management of the OMERS surplus that will be complete by August 1999.

Contact Name:

Ivana Zanardo, Director, Pension, Payroll & Employee Benefits

397-4143

Shekhar Prasad, Director, Budget Services

392-8095

12

May 1998 Capital Budget Variance Report

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee submits for the information of Council, the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the report (July 23, 1998) from the Chief Financial Officer and Treasurer be forwarded to Council for information.

Background:

The Budget Committee had before it a report (July 23, 1998) from the Chief Financial Officer and Treasurer regarding the May 1998 Capital Budget Variance Report.

Councillor Norman Gardner addressed the Committee in connection with this matter.

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(Report dated July 23, 1998 addressed to the Budget Committee

from the Chief Financial Officer and Treasurer)

Purpose:

The purpose of this report is to review the status of Capital Projects as of May 31, 1998.

Funding Sources, Financial Implications and Impact Statement:

The spending of City departments on capital projects approved for financing in 1998 is on target. The Police and TTC are expected to overspend their 1998 net capital budget allocations by $4.1 million and $8.0 million respectively.

Recommendations:

(1)That this report be received for information.

(2)That any underspending arising from individual capital projects in Department projects not be reallocated to new projects at this time but be considered in October 1998 in light of total capital spending to August 31.

Background:

At its special meeting of April 29 and April 30, 1998, Council approved a capital budget of $1,063.569 million (gross) and $600.092 million (net before reserves) and $122.1 million net debt for tax supported projects. Subsequently Council amended the Capital Budget to $1,134.957 million (gross) and $637.080 million (net) as shown in Table 1 below. Given that the transition projects are the subject of various subsequent report - hence no spending at this time - the budget variance report has been adjusted to remove the transition projects ($85.5 million gross and net) from the analysis.

This report is based primarily on financial information and explanation of variances as provided by departments and agencies. It focuses on variances projected to year-end; especially where a project's variance is greater that $1 million. At this time of the year the projections are quite preliminary, but the projections will become firmer for the August, and especially, for the November variance reports.

--------

Table 1

Adjustments to 1998 Capital Budget

($000's)

* June 3, 1998 Council approval.

Discussion:

The Corporation funds its tax supported gross capital program through various sources of revenue, specifically subsidies from the Province, grants, and revenue from other sources and a combination of reserves, capital from current and debt. Funding for the capital budget can also be broken down into funding from rate supported fees (Harbour Commission, Parking Authority, TEDCO, water supply and water pollution control).

The overall corporate variance is summarized in Table 2 below. The financing of the Capital Budget was based on the assumption that at year-end there would be a 15 per cent under expenditure. At this time, for the tax supported projects, there is a projected one per cent over expenditure. As a result, there is no excess funding available to support additional projects at this time and no reallocation of underspent project dollars to new projects should be approved at this time.

________

Table 2

Aggregate Budget Variance

($ Millions)

The Corporation's projected gross expenditure for the year is $1,055.7 million, which is $6.3 million or 0.6 per cent over budget. This represents an over expenditure on the tax supported budget of $9.2 million. On a net basis, the projected expenditures for the year are $552.9 million, which is $1.3 million or 0.2 per cent over budget. This represents an over expenditure on the tax supported budget of $4.6 million.

Where the variance for a project within a service area is greater than $1 million gross, it is discussed on an individual basis below. In summary, the major services which are projecting to be over-spent at year-end on a net basis are Information Technology, Police, and TTC. The remaining service areas are projecting to be underspent. The lateness of the Capital Budget approval is the primary reason given for the projected underspending. In many of these cases there is no impact on the overall project cost but will result in a transfer of the cash flow needs from 1998 to later years.

Most of the approved capital projects continue to remain within the updated debt and financial obligation limit. While the City's debt issuance requirements for 1998 remain unchanged, it is an historic project underspending of 15 percent being achieved by year-end. The next Capital Budget Variance Report will cover the period ending August 31, 1998 will be before the Budget Committee in September. If required, amendments to the recommendations contained in Clause No. 1, Report No. 6 of the Strategic Policies and Priorities Committee (Proposed Capital Financing Management Plan and Other Capital Funding Issues) would be incorporated into that budget variance report or into the pending debt management plan.

Specific Variances:

Appendices A and B provide a synopsis by service area of the budget variances both gross and net (before reserves). What follows is a brief commentary, based on information provided by departments and agencies, for those projects where the variance is more than $1 million gross.

(1)Community Services:

There is an overall under expenditure of $5.8 million (gross) and $0.3 million (net) mainly due to:

(a)$2.0 million (gross) for the equity corporation is delayed due to complications associated with the devolution of social housing to the municipality;

(b)$2.0 million (gross) for Asset Management is delayed due to complications associated with the devolution of social housing to the municipality; and

(c)$1.4 million (gross) for Energy Management is delayed due to complications associated with the devolution of social housing to the municipality.

(2)Fire Services:

There is an overall under expenditure of $2.0 million (gross and net) mainly due to:

(a)$2.0 million for the Harbourfront Firehall is delayed due to construction delays.

(3)Other Projects: Information Technology

There is an over expenditure of $1.5 million (gross) and (net) due mainly to:

(a)$1.4 million for Corporate Management Information System is due to a deferral from 1997.

(4)Parks and Recreation:

There is an overall under expenditure of $6.7 million (gross) and $3.6 million (net) mainly due to:

(a)$2.4 million (gross) for Heron Park Recreation Centre is delayed due to public consultation; and

(b)$3.0 million (gross) for the Scarborough Community Complex due to the delay in the public fundraising required for the project.

(5)Toronto Police Service:

There is an over expenditure of $4.1 million (gross) and (net) due mainly to:

Over Expenditures

(a)$5.2 million for Metropolis. The total budget was approved at $60.6 million (approved over 5 years, from 1992-1997). During the 1998 Capital Budget process, a $1.0 million carryover was projected. The Budget Committee, and subsequently Council, deleted this $1.0 million from the Capital budget, leaving the total approved budget at $59.6 million.

Metropolis has had a budget carryover every year since its inception. Annual delays in release of funds, occasional changes in scope due to the changing world of technology, and the vagaries of the bidding/tendering process have resulted in a $5.2 million carryover to 1998. It is projected that total project spending of $59.6 million, which includes the $5.2 million carryover, will be expended by November, 1998;

(b)$1.5 million for the Forensic Identification Facility is due to various factors, including design changes, rezoning of the site, and unforeseen site difficulties. This project was underspent in 1997 by $2.7 million. In addition, the project has been delayed and is now projected to be completed by early 1999. 1998 expenditures are projected to be $4.1 million, which is $1.5 million over the 1998 budget; and

(c)$1.4 million for the underground communications project, property warehouse project and firearms conversion which were delayed from 1997. The Property Warehouse project's total budget was approved at $2.0 million and was projected to be completed by year end 1997. The project is essentially complete, with some outstanding renovations and financial holdback. The full remaining $0.4 million is projected to be spent for 1998.

Under Expenditures

(a)$1.9 million for the occurrence re-engineering project has been delayed due to the partnering with the RCMP in the Common Police Environment Group (CPEG) initiative. The RFP was originally planned to be released in 1997, and did not take place until April, 1998. As a result, the $1.4 million 1997 budget was not spent, and has been carried forward to 1998. The RFP has now closed, and the project is expected to continue, albeit with some further delays due to the joint process. 1998 expenditures are projected to be $3.1 million, or $1.9 million below the 1998 plan; and

(b)$1.5 million for the radio switch was delayed by the late approval of the capital budget.

(6)Toronto Transit Commission:

There is an over expenditure of $20.8 million (gross) and $8.0 million (net) due mainly to:

Over Expenditures

(a)$12.3 million (gross) for buses reflects the delayed delivery of Orion VI CNG buses from 1997;

(b)$7.8 million (gross) because of a delay in land negotiations for a bus garage and acquisition by City Property Department from 1997 impacting project schedule;

(c)$5.5 million (gross) for communications program reflects slippage of 1997 expenditures due to significant delays in the fibre optics and radio communications project installation schedule. Finishes reflects slippage of 1997 expenditures associated with the overhead door replacement program and Spadina Subway skylights and delays in award of supply/installation contract of combustible gas detection in the existing Greenwood Carhouse; and

(d)$5.5 million (gross) for surface track rehabilitation and Spadina Subway Extension mainly reflects an allowance for absorption of full costs of excavating and paving within the right-of-way related to surface track rehabilitation projects as well as costs of outstanding contract changes on signals contract are considerably higher than anticipated. Negotiations and an audit are being pursued with the contractor.

Under Expenditures

(a)$5.8 million (gross) for Queens Quay streetcar connection delayed due to the timing of the Capital Budget approval;

(b)$3.4 million (gross) for elevators in subway stations delayed due to design, and soils and site conditions; and

(c)$2.6 million (gross) for contract and supply payments for the Sheppard Subway delayed.

Subsequent to the submission of the May 31, 1998 budget variance report, the TTC reported to the Budget Committee that there could be an increase of as much as $39.3 to $44.3 million in the total cost of the Sheppard Subway. The Commission is exploring options to mitigate this overage and will be reporting further in September.

(7)Parking Authority:

There is an over expenditure of $1.9 million (gross) and $0 (net) due mainly to:

(a)$1.9 million (gross) for the parking garage on site of carpark 13 is going to be over spent as compared to the 1998 authorization but this overage will be "funded" from unused prior year's authorization, and therefore, no adjustment to the 1998 authorization is necessary.

(8)TEDCO:

There is an overall under expenditure of $1.1 million (gross) and $0 (net) due mainly to:

Over Expenditures

(a)$1.6 million (gross) for the Basin St. extension and $1.7 million (gross) for Commissioner's St./Don Roadway Land Acquisition are going to be over spent as compared to the 1998 authorization but this overage will be "funded" from unused prior year's authorization and, therefore, no adjustment to the 1998 authorization is necessary.

Under Expenditures

(a)$4.6 million (gross) for the Commissioners St. Redevelopment is delayed due to a change in the timing of expenditures, primarily related to soil remediation, and due to work delays relating the site approvals required by a new tenant.

Conclusions:

The year-end projection for the tax supported portion of the Capital Budget indicates that overall there will be a $4.6 million overage or one per cent. The budget expenditure pattern for most departments is generally consistent with the financing plan. However, based on the year-end projection, there is no excess funding available to support additional projects at this time.

Contact Name:

Donald Altman, telephone: 397-4220; fax: 392-6963; e-mail: daltman@toronto.ca

________

Appendix A

Gross Project Expenditure - Corporate Summary

(in $000's)

1998 Total Year

Year-end

Year-to-DateCurrentVariance

Actual as atProjectedYearOver/(under)

May 31, 1998Year-endEstimateEstimate%

(1) (2) (3) (4) = (2)-(3)

Arts, Culture & Heritage4773,5203,52000

Community Services4,02916,21221,978(5,766)(26)

Conservation Authority03,8553,85500

Economic Development01,8421,84200

Exhibition Place737,4907,49000

Facilities Management(400)13,35813,360(2)(0)

Fire211,0003,039(2,039)(67)

Libraries01,3811,826(445)(24)

Other Projects(535)4,0432,5011,54262

Parks & Recreation1,01053,32760,059(6,732)(11)

Police1,95929,84225,7774,06516

Solid Waste Management2,06818,05718,932(875)(5)

Transportation13,737117,198118,298(1,100)(1)

TTC121,758622,808602,03820,7703

Urban Planning02,1302,335(205)(9)

Zoo 528 5,384 5,434 (50) (1)

Total Tax Supported144,725901,447892,284 9,163 1

Harbour Commissioners22411,13711,153(16)(0)

Parking Authority6817,35715,4831,87412

TEDCO907,0298,128(1,099)(14)

Water Pollution Control12,56570,95471,664(710)(1)

Water Supply 3,187 47,832 50,747(2,915) (6)

Total Rate Supported16,134154,309157,175(2,866) (2)

Grand Total160,8591,055,7561,049,459 6,297 1

Appendix B

Net Project Expenditure - Corporate Summary

(in $000's)

1998 Total Year

Year-end

Year-to-DateCurrentVariance

Actual as atProjectedYearOver/(under)

May 31, 1998Year-endEstimateEstimate%

(1) (2) (3) (4) = (2)-(3)

Arts, Culture & Heritage4773,5203,52000

Community Services1,3976,0156,273(258)(4)

Conservation Authority03,8553,85500

Economic Development01,3761,37600

Exhibition Place737,4907,49000

Facilities Management(422)12,27613,190(914)(7)

Fire211,0003,039(2,039)(67)

Libraries01,3811,826(445)(24)

Other Projects(481)4,0432,5011,54262

Parks & Recreation1,01041,39645,028(3,632)(8)

Police1,95929,84225,7774,06516

Solid Waste Management2,00017,97718,852(875)(5)

Transportation11,739110,351110,911(560)(1)

TTC30,725206,126198,1637,9634

Urban Planning02,1302,335(205)(9)

Zoo 528 392 442 (50)(11)

Total Tax Supported49,006449,170444,5784,592 1

Harbour Commissioners00000

Parking Authority00000

TEDCO00000

Water Pollution Control12,56564,45465,027(573)(1)

Water Supply 3,276 39,251 41,976(2,725) (6)

Total Rate Supported15,841103,705107,003(3,298) (3)

Grand Total64,847552,875551,581 1,294 0

13

Implementation of a 100 Percent Bio-Solids Beneficial

Reuse Program at the Main Treatment Plant

(City Council on July 29, 30and 31, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 29, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on July 28, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (July 24, 1998) from the Commissioner of Works and Emergency Services, wherein it is recommended that staff be authorized to transfer funds within the 1998-2002 Capital Works Program from the Ultra Violet Trials within the Main Treatment Plant project to the Bio-solids Independent Review Committee Project.

Background:

The Budget Committee had before it a report (July 24, 1998) from the Commissioner of Works and Emergency Services regarding the Implementation of a 100 Per Cent Bio-solids Beneficial Reuse Program at the Main Treatment Plant.

________

(Report dated July 24, 1998, addressed to the Budget Committee

from the Commissioner of Works and Emergency Services)

Purpose:

To identify funding sources in the 1998-2002 Capital Works Program for 1998 expenditures related to the Independent Review Committee for the Implementation of a 100 Percent Bio-solids Beneficial Reuse Program at the Main Treatment Plant.

Recommendations:

That we be authorized to transfer funds within the 1998-2002 Capital Works Program from the Ultra Violet Trials within the Main Treatment Plant project to the Bio-solids Independent Review Committee Project.

Funding Sources, Financial Implications and Impact Statements:

There are no additional financial implications arising from this report.

Council Reference/Background/History:

At its meeting held on July 8, 1998, City of Toronto Council adopted Clause No. 2 of Report No.6, of Works & Utilities Committee, titled Implementation of a 100 Percent Bio-solids Beneficial Re-Use Program. The report authorized the establishment of an Independent Review Committee for the purposes of providing peer review of the Bio-solids Project and the move away from incineration to 100 percent Bio-solids Beneficial Reuse Program.

Comments and/or Discussion and/or Justification:

The recommendations in the above mentioned report authorized the commitment of funds up to $715,000.00 for 1998 related to 100 Per Cent Bio-Solids Beneficial Re-use Program at the Main Treatment Plant. Funding for this expenditure can be obtained as a result of the expenditure delay in the Ultra Violet Trials Project at the Main Treatment Plant due to the change in ownership of the selected contracted company. This change has caused a delay in the testing program.

Accordingly, we request that $715,000.00 of the 1998 Estimate for the Ultra Violet Trials, Account No. C-WP160-S20297 be transferred to C-WP160-S20513, Bio-solids Independent Review Committee . This will result in a revised 1998 Estimate for the Ultra Violet Trials of $225,000.00

Conclusions:

It is recommended that $715,000.00 be transferred from the Ultra Violet Trials Project at the Main Treatment Plant to provide for the Bio-Solids Project.

Contact Name:

Mr. R. M. Pickett, Director,

Water Pollution Control Division

Telephone: 392-8230;

Fax: (416) 397-0908

E-Mail bob_pickett@metrodesk.metrotor.on.ca.

14

Other Items Considered by the Committee

(City Council on July 29, 30and 31, 1998, received this Clause, for information.)

(a)Decision of The Jane Doe Civil Matter

The Strategic Policies and Priorities Committee reports having met in camera and having heard a verbal presentation by Mr. George Rust-D'Eye, Weir and Foulds, on behalf of the Toronto Police Services Board.

(July 28, 1998) from the Toronto Police Services Board, requesting an opportunity to address the Strategic Policies and Priorities Committee.

(b)Impact of Big Box Retail Development on the Toronto Community's Retail Strips

The Strategic Policies and Priorities Committee reports having recommended to City Council the adoption of the recommendation in the transmittal letter (July 29, 1998) from the Budget Committee; and that such recommendation be considered with Clause No. 59 of Report No. 10 of Toronto Community Council headed "Impact of Big Box Retail Development on the Toronto Community's Retail Strip:

(July 29, 1998) from the Budget Committee recommending that funding in the amount of $35,000.00 from the Contingency Account be allocated to the Operating Budget of the Economic Development, Culture and Tourism Research Study, conditional upon the said $35,000.00 being replenished by the Toronto Economic Development Corporation for repayment of same.

(c)FIS/HRIS Project - Second Consultant Review

The Strategic Policies and Priorities Committee reports having submitted the transmittal letter (July 29, 1998) from the Budget Committee to Council without recommendation, for consideration with Clause No. 1 of Report No. 10 of the Corporate Services Committee headed "Project Proposal, Financial and Human Resources/Payroll Systems".

(July 29, 1998) from the Budget Committee recommending that the report (July 28, 1998) from the Chief Financial Officer and Treasurer and Chair, FIS/HRIS Steering Committee, recommending that the report from Brian Dunk Consulting Services Limited be received and the FIS/HRIS transition project at a total cost of $26.3 million with approval of the 1998 project financing of $6.1 million from the Transition Reserve Fund with a report back in September 1998 outlining project financing requests for 1999 and 2000 based on contract terms and conditions to be negotiated with SAP that have regard to matching cashflow to project milestones and project risk be approved, be forwarded to Council, without recommendation.

Respectfully submitted,

CASE OOTES,

Chair Pro Tem

Toronto, July 29, 1998

(Report No. 16 of The Strategic Policies and Priorities Committee, including an addition thereto, was adopted, as amended, by City Council on July 29, 30 and 31, 1998.)